Preamble

The House met at half-past Nine o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Intergovernmental Conference

Motion made, and Question proposed, That this House do now adjourn.—[Dr. Liam Fox.]

Mr. Christopher Gill: I am grateful to you, Madam Speaker, for granting this important debate this morning. I feel enormously privileged to open the first of two debates on the White Paper on the intergovernmental conference. As we all know, the IGC is scheduled to start its deliberations on 29 March and, in the intervening period, right hon. and hon. Members will have the opportunity to form opinions about whether the negotiating position set out in the White Paper reflects their aspirations for the future of the European Community and, more to the point, their aspirations for the future of the country to which we all belong and to whose sovereign we have all sworn an oath of allegiance.
It is a sad commentary on our times that, at this defining moment in our nation's history, the White Paper makes but a passing reference to the single currency, which is pivotal to the debate about the future of the Community.

Mr. David Harris: That has nothing to do with the IGC.

Mr. Gill: Doubtless that is because the Government believe, or have been pressured into believing, that economic and monetary union do not lead to political union. I hope that my hon. Friend the Minister of State, when he replies to the debate, will confirm or deny that the statement made to me by the Economic Secretary in her letter of 15 February—that
any move to monetary union … does not necessitate political union"—
is an accurate representation of Government thinking.

Mr. Harris: rose—

Mr. Tony Marlow: rose—

Mr. Gill: I intend to give way to hon. Members, and I notice that two of my colleagues wish to intervene. I wish to reach the end of my first section and then I will give way. I have a long speech to make and I do not wish to prolong the debate unduly.
Notwithstanding the answer to my question that my hon. Friend the Minister of State will give the House, let me remind him that there is a strong and growing body of opinion in Parliament and in the country that will not accept the abolition of the pound sterling and the consequences

that must inevitably stem from that decision. So the second question my hon. Friend must answer, assuming that the Economic Secretary's statement is correct, is how the Government will persuade the people of this country that they have genuinely set their faces against political union.

Mr. Marlow: I thank my hon. Friend for giving way to me because I may be able to answer the question that my hon. Friend the Member for St. Ives (Mr. Harris) tried to put. From a sedentary position, he suggested that monetary union was nothing to do with the IGC. The IGC is about any reform of or changes required to the Maastricht treaty, and half of the treaty is to do with monetary union. Therefore, monetary union is a proper subject to discuss at the IGC.

Mr. Gill: I agree with my hon. Friend and I hope that he has satisfactorily dealt with the point that my hon. Friend the Member for St. Ives (Mr. Harris) made from a sedentary position.
I remind my hon. Friend the Minister that I asked whether the advice that I have been given by the Economic Secretary is correct and, if it is correct, how we will persuade the great British public that economic and monetary union does not lead on to political union. When he answers that second question, may I urge my hon. Friend to recognise the fact that we are long past the point at which mere rhetoric will satisfy the voters, because for 25 years or more they have been duped and deceived by politicians whose hidden agenda is only now revealed? My hon. Friend must explain how, in logic, it is possible for a nation to surrender its currency without at the same time surrendering its sovereignty. Without a satisfactory answer to those questions, the House is entitled to conclude that the end game—as many of us have long suspected—is not a Europe of nation states, but a totally integrated United States of Europe. Why else is it that Governments have signed not one but three significant treaties, all of which have imposed ever-increasing hegemony on Europe? I trust that the Minister will answer that question too.
I turn next to the submissions that Ministers have received in advance of yesterday's publication of the White Paper. Quite apart from representations from individual Members of Parliament, my hon. Friend will also be aware of the papers submitted by the Conservative 2000 group, the British committee of the European Research Group—comprising 12 right hon. and hon. Members—and the group of eight Conservative Members from whom the party Whip was withdrawn on 28 November 1994, because of their refusal to support a Government motion to send an additional £75 million to Brussels. I trust that the Minister will not be dismissive of the views expressed in those submissions, and that he will not underestimate the huge body of public opinion that supports them—a body of opinion that will be profoundly disappointed by the Government's failure to produce proposals for treaty amendments.
Although I welcome the modest objectives that Ministers have set themselves, I will not be alone in expressing the view that failure to identify treaty changes will come to be regarded as a missed opportunity to recover competences that should never have been given away in the first place. While I am grateful that Her Majesty's Government have acceded to the request from the so-called Euro-rebels for a White Paper, I hope against hope that the statement in the conclusions of the White Paper—that the Government are


still considering their detailed approach—is a sign that Ministers, even at this late stage, are prepared to modify their negotiating stance in the light of today's debate and in the light of the debate that will take place on Thursday week. Perhaps when he sums up the Minister will be kind enough to give me that assurance.
I should like now to draw the House's attention to the submission of the European Commission—

Mr. Marlow: rose—

Mr. Gill: I will give way to my hon. Friend provided that he is not going to be a complete nuisance.

Mr. Marlow: I am afraid I am. We dislike party splits, but I am afraid that there is a split between my hon. Friend and me. He says that the Government are not asking for treaty amendments, but in yesterday's statement the Foreign Secretary said:
The Government do not believe that directives, once enacted, are irreversible, and will press for treaty amendment if that proves to be the best way".—[Official Report, 12 March 1996; Vol. 273, c. 786.]

Mr. Gill: I am grateful to my hon. Friend for pointing out that error in my speech.
The submission by the European Commission is entitled "Reinforcing Political Union and Preparing for Enlargement". On the very first page of the document it is unequivocally stated in paragraph 2 that since 1993 the member states have adopted and given effect to the treaty on European union, which derives from
a broad, twofold aspiration: a determination to extract all the positive effects of the internal market by adding to it a single currency … and … to give the union a genuine political dimension".
Later, in paragraph 6, it is stated that
the deepening and widening of the Union are intertwined.
Barring the odd detail here and there, the Commission's opinion probably reflects the views of a majority of the member states. It is instructive, therefore, to compare it point by point with our Government's White Paper. The Commission says, for example, that there should be a stronger role for the European Court of Justice. If there is one special disappointment in the White Paper, it is that Her Majesty's Government's stated position on the ECJ is far less robust than we had expected. My hon. Friend, the Minister will not be surprised to hear me say that the House will want to examine the Government's proposals for reform of the European Court in some considerable detail when the promised memorandum is eventually published.
The Commission states:
The social dimension should be one of the central themes at the Conference".
On the other hand, Her Majesty's Government make it clear beyond all reasonable doubt that they will not accept the social chapter, when they state that
the United Kingdom will not give up its opt-out and cannot be forced to do so".
The Commission says that
it should have the power of initiative in all fields.
Our Government say that
the EU is not a state and should take care not to develop ideas that feed people's fears"—

they are real fears—
that it has a vocation to become one.
In this connection I welcome the statement that the Government are considering ideas for limiting the scope for Community action in certain areas—in particular, to prevent the health and safety article being used for social policy by the back door. What a hollow ring that statement has in the light of yesterday's recommendation by the Advocate General concerning the working time directive; and what a vindication for all of us who have been warning the Government that Britain's opt-out from the social chapter would be circumvented in precisely this way.

Mr. David Nicholson: I am most grateful to my hon. Friend for giving way and I am sure that my he, like me, will welcome the fact that after a number of outrageous and deeply offensive decisions by the European Court of Justice and the—entirely separate—European Court of Human Rights, Her Majesty's Government are at last facing up to these matters. I hope, however, that my hon. Friend will spell out what further practical measures he would like HMG to adopt in this respect, because I foresee difficulties.

Mr. Gill: I am grateful for that important point. There is increasing resentment among the people whom we represent at the ever-increasing number of decisions taken by this people's Parliament which have been overturned by the European Court of Justice. Many of us, like my hon. Friend, feel very strongly about that—as I am sure the Government know.
The Commission believes that
there should be a transfer of justice and home affairs to the Community framework.
That stands in complete contrast—to answer my hon. Friend's point—with what is advocated by the Government, who seek
a greater role for national Parliaments in the justice and home affairs pillar.
Similarly, the Commission says that the contents of the Schengen agreement should be incorporated in the treaty; but Her Majesty's Government have refused to accept that agreement. The whole House will welcome the renewed commitment to the third pillar given in paragraph 49, and the pledge in paragraph 51 to
take whatever steps are needed to maintain our frontier controls".
On foreign policy, the Commission says that
the Union must be able to present a united front.
Her Majesty's Government say, quite rightly, that
the common foreign and security policy can never become an exclusive policy that would replace national foreign policy. The Commission takes the view that qualified majority voting should be the norm for the CFSP. The British Government do not accept that the unanimity provisions for the CFSP constitute a restriction on its development, or that it would be strengthened by the introduction of voting models that overrode the key concerns of member states.
Still on the subject of external relations, the Commission believes that a proper common foreign and security policy should also extend to common defence, and that this requires the better integration of the armaments industry in the general treaty rules. The Government's oft repeated view is that
decisions on defence policy should remain where they belong—with sovereign nation states".


I am quite sure that the House welcomes that adamant statement in the White Paper.

Sir Teddy Taylor: While I agree that we should welcome the Government's commitment to maintaining our border controls, will my hon. Friend make it clear to the House and the country that if the European Court of Justice tells us that we cannot maintain those controls any longer, there will be nothing the Government can do about it?

Mr. Gill: I am grateful to my hon. Friend for adding to the burden of my submission.
Still on the question of defence, all the lessons of history demonstrate that it is quite right and proper for Britain to take the view that she does—that decisions on defence policy should remain with nation states. It must be made clear to our European partners that anything which takes away from or undermines NATO is simply not acceptable. The White Paper commitment that any review of article J4
should aim to reinforce NATO as the bedrock of European security
is most welcome; as is the statement that it would be inappropriate for the Commission, the European Parliament or the European Court of Justice to have any role in defence decision making.
On voting procedure,
the Commission … proposes that qualified majority voting becomes the general rule".
Her Majesty's Government are opposed to further extension of qualified majority voting.
Finally, the Commission concludes by advocating
the shift to a more genuinely Political Union"—
a determination powerfully articulated only yesterday by Messrs Maartens and Santer, who make no secret of the fact that the pre-eminent objective in Europe remains, as it always has been, political union.
Throughout the 20 pages of the Commission's opinion, I can find only three phrases with which I can agree: first, its conclusion that
this debate must be opened up at once, in order to give the negotiators their bearings";
secondly, its opinion that
Europe must do less, so as to do it better";
and, thirdly, its statement that
only a competitive economy can create lasting jobs
platitudes that are practically meaningless in the circumstances in which the voice of the people has either been ignored, as in the case of the first Danish referendum on Maastricht, or not even sought, as in our own case; circumstances in which all the indications are that far from doing less the Commission continually seeks to do more, as evidenced by the opinion to the IGC from which I have quoted; and circumstances in which whole industries face an uncertain future due to the overweening interference of a bureaucracy in Brussels that has an interventionist approach to economic affairs which is totally at odds with the policies of our Conservative Government.
The prospects of the United Kingdom getting satisfaction in almost any subject area are, on any rational analysis of the evidence available, remote. Our objectives, as I have demonstrated, are in many instances totally opposed to those of the Commission. We are poles apart. It is unlikely that other member states will take our part, and on the basis of past performance I am sad to say that it is highly probable that we shall seek to appease and compromise rather than challenge and confront.
But there are those of us who believe that some good could come out of the IGC if instead of playing on our weaknesses we played to our strengths. Having already given so much away—our fishing rights are a good example of this—we have little to barter with, but in that context I should remind Ministers that although I welcomed the commitment to end the abuse of quota hoppers, nothing short of the restoration of full national control over our exclusive fishing zone will satisfy the fishing industry and those of our constituents who are equally incensed by the common fisheries policy.
The time has come for us forcefully to remind our European partners that we in the United Kingdom contribute 60 per cent. of the EU fish stocks, that we are a net importer of goods from other countries in Europe, and that with Germany we effectively bankroll the rest of the Community. At the end of the day, we have a veto and we must not be afraid to use it.
I conclude by saying what I have said on so many occasions. In the final analysis, if we cannot get a deal that protects British interests and is acceptable to the majority of the British people, Her Majesty's Government must be prepared to get up from the conference table and walk away. Taking the lead in Europe is not about rushing to the head of a queue that is going up a cul-de-sac. It is about persuading Europe's political elite that the whole concept of European Union is doomed to failure unless they can carry the people with them.
Once again, it is Britain's historic destiny to champion the cause of freedom and guide our European partners away from the totalitarianism that threatens to engulf them. I urge the whole House, in giving our negotiators their bearings for the forthcoming IGC, to make clear its opposition to political union and, indeed, to any other proposal that would lead to that same conclusion.

Mr. Stuart Randall: rose—

Mr. Gill: It is most unfair of the hon. Gentleman to interrupt my peroration, but as I have not given way to the Opposition, I gladly do so now.

Mr. Randall: Did I hear the hon. Gentleman clearly? Did he say that the British Government should walk out of the IGC?

Mr. Gill: Yes, indeed he did. I very much take the view that the British Government must approach the IGC as hard-nosed business men. They have to strike a bargain there, not to please the Foreign Office or the Front Bench but to please this Parliament and the people. It will not work if they do not. I am grateful to the hon. Gentleman for his intervention, as it gave me the opportunity to make that very important point. Sadly, the House lacks people with experience of having to strike bargains. It seems to me that the history of our overseas negotiations in the post-war


period is to approach negotiations in a spirit of compromise. "We have to get a deal" is the attitude that seems to pervade the Foreign Office. I do not share that attitude. I feel most strongly, as do many of my constituents, that unless we can get a deal that is good for Britain, good for British industry, good for Britain's farmers, and good for Britain's fishermen, we cannot afford to sign up any further.
I trust that my hon. Friend the Minister will recognise that, in not going far enough with the White Paper—either in the direction of our European partners on the one hand; or, on the other, in the direction of British public opinion—the Government risk falling between two stools. At the end of the day, I trust that Ministers will recognise the inescapable reality that in all these matters it is British voters who will have the final say. I am quite sure that my hon. Friend the Minister, who is an astute politician, will recognise that fact.

Mr. Andrew Mackinlay: I congratulate the hon. Member for Ludlow (Mr. Gill) on persuading you, Madam Speaker, to allow us to have this debate. It is timely—

Madam Speaker: The debate was won by ballot. It has nothing whatever to do with me.

Mr. Mackinlay: I am sorry about that. That is why I have always been polite to you, Madam Speaker. I was always living in hope that I might succeed.
I congratulate the hon. Gentleman on this timely debate. I am pleased to take part, as a large number of us will be squeezed out of the main debate on the IGC White Paper to be held a little later. It should be a two-day debate, not a one-day debate, but I guess that the powers that be on the two Front Benches will concoct that it will be a one-day debate. We shall see.
I approach the debate as someone who describes himself as a European. I believe in the concept of the European Union. I was keen to contest European elections long before it was fashionable in the Labour party to do so. I make that declaration. I have spoken before in the House about the need for the whole-hearted consent of Parliament and the people to any further integration or treaty arrangements. Therefore, if there was to be any significant constitutional change following the IGC, it should be put to the people by referendum.
I do not argue for a referendum as a political expedient, which is why the Prime Minister is now contemplating one in order to get himself off a dangerous hook, or indeed which was the motive of Harold Wilson. I believe that referendums are a good practice in our democratic processes. We should have referendums more often where there are constitutional changes. I would like to see legislation that would allow Madam Speaker to decide that matters that were of paramount importance relating to the constitution were subject to ratification by the people. I believe that that is what should happen with regard to this and other important matters.
I believe that the IGC will soon discover that there is limited scope for deepening the Community. That may be a good thing. Public opinion, not just in this country but elsewhere in western Europe, needs a few years—perhaps

a decade or more—to digest what has been a rapid change in the European Union. There needs to be consolidation, a bedding down, before people, Parliaments or Governments contemplate any major changes.
I shall deal with an issue that is often thrown across the Chamber, that somehow my party is federalist whereas the Conservative party is not. That is absolute rubbish. I have never heard or known of a Labour Member who is a federalist. I have noticed, however, that there are always at least two or three federalists on the Conservative Benches—I notice that they are not in their place this morning, but hon. Members will know precisely who I mean—those who are prepared to contemplate a formal European Union on a federal basis. The federalists are on the Conservative Benches. That needs to be made quite clear.
For me, a priority is not the deepening but the widening of the Community. A historic window of political opportunity is open to us—the opportunity to entrench, preserve and promote the emerging and, in some cases, delicate democracies of central Europe. I see membership of the European Union as part of that. I would give a great deal to bring Poland in particular, Hungary, the Czech Republic—the Visegrad countries—and some other states into the Union—and, for that matter, NATO—as soon as possible.
I was somewhat irritated by the Government's failure officially to mark the 50th anniversary of Winston Churchill's speech at Fulton, Missouri. It was wrong on a number of counts to abdicate that to Lady Thatcher. I mentioned the speech in the Chamber some months ago, and also asked the Foreign Office to mark the anniversary officially. Let us remind ourselves of what was said in 1945: "From Stettin in the Baltic to Trieste in the Adriatic an iron curtain has descended across Europe behind which we must refer to it as, the Soviet sphere."
For half a century we have been saying to the countries of central Europe, "Look over the wall. See how wonderful things are in the west." Anyone who believed our propaganda would think that the sun always shone and the rain never fell in western Europe. What happened then? Communism collapsed, the wall came down and those countries asked, not unreasonably, "Can we join the club?" We said, "Hang on a moment. There are a good many things to decide."
I do not want to minimise the hurdles that stand in the way of facilitating the entry of Poland, Hungary, the Czech Republic and other states into the European Union, but our moral obligation is not being recognised by our Government and, perhaps, others. There is an urgent need for us to fulfil duties of which we spoke for over 50 years, and which constituted the raison d'être for the cold war. Now we are trying to find excuses to keep those countries out, which is entirely wrong. I stand by the commitment made at Fulton: we should not now concede, instead of a Soviet, a Russian sphere of influence. There should be no Russian veto on the legitimate aspirations of free democratic countries.

Mrs. Teresa Gorman: Will the hon. Gentleman give way?

Mr. Mackinlay: No, I will not. Time is limited. Moreover, the hon. Lady speaks about Europe a great deal, whereas I do not speak about it very often.


Page 9 of the White Paper states that Parliament must approve any new treaty that emerges from the IGC. May I ask the Minister whether that constitutes a change of policy on the part of Her Majesty's Government? One point on which I agree with some Conservative Members is that our Parliament is always denied the right to approve treaties. We approved legislation subsequent to the Maastricht treaty rather than approving the treaty itself. Is it true that our Parliament will approve our treaty accession if a new one emerges from the IGC? If so, I welcome that, but, if not, the Minister should clearly state that we will not have such an opportunity, and that approval will be given by means of the royal prerogative. That would be entirely wrong: treaties should be approved by the legislature, as they are in other countries.
On page 15 of the White Paper, a great deal of humbug is spoken about the role of national Parliaments in relation to the business of the European Union. Having been in the House for nearly four years, I must say that I think that the way in which we scrutinise European legislation is a sham. This lovely Parliament, of which I am proud to be a Member, needs to crank up its machinery so that we can probe and criticise European legislation much more effectively. It is interesting to note that European Standing Committees A and B sit in Committee Rooms where there are no television cameras. I think that television is an important part of scrutiny. Everything is loaded against the possibility of holding a full debate and public understanding of what is going on. Parliament should be much more proactive, and should be able to initiate developments in Europe; but there is no real scope for that here.
Paragraph 30 of the White Paper, on page 15, refers to new competences, and mentions areas of competence that the Government do not think it appropriate to cede to the European Union. I shall not comment on what is said there, but I note what has been omitted. I am interested to note that there is no reference to aviation policy, airports and air traffic control. Do Her Majesty's Government concede that such matters are to be a European competence? As it happens, I think that that is inevitable and might even be a good thing, but I should like to know the position. If it is not the case, however, the Government clearly needed my assistance when preparing the White Paper, because they overlooked these matters.
The White Paper makes great play of the size of the Commission. I do not understand why that is a big issue. As I have said, I look forward to enlargement. I suspect that some small states will join the Union in the not too distant future; I accept that not every state should necessarily be able to nominate a Commissioner, but certain portfolios such as transport and foreign affairs can clearly be broken down, in the case of transport, into various forms of transport, and in the case of foreign affairs, into geographical areas. All Parliaments have junior Ministers. I know that Commissioners are not the equivalent of Ministers, but surely enough portfolios are available for each country to be able to nominate a Commissioner or an assistant Commissioner.
The White Paper makes various suggestions about how progress should be made as enlargement continues, and they are worthy of consideration. As I have said, I do not think that there is much scope for change. Existing arrangements should be allowed to bed down; by and large, qualified majority voting should remain as it is now.
Euro-sceptics have repeatedly referred to the decisions of the European Court, but the White Paper reveals that its judgments have gone against the United Kingdom on relatively few occasions. I do not say that; the Government do. We must see the position in perspective. On occasion the United Kingdom errs in its interpretation of European Union treaties, and it is in the nature of court cases that we are sometimes disappointed. You win some, you lose some.
It should be said that some recent judgments are very welcome, because they will protect workers. It should also be said that Ministers who go on about resisting the social chapter are talking absolute rot. In this regard, I probably agree with some Conservative Members. As sure as night follows day, much of what is in the social chapter will be conceded by the Government. They will huff and puff, and pretend that it is all the doing of a load of judges in Europe, but they will concede it. I welcome that; I part company with my Essex colleagues who disapprove of it. We can agree, however, that the Government's protestations of innocence are cosmetic rubbish. Inexorably changes will come about that will improve the lives of working people, increasing their capacity to shape, influence and have access to developments that affect their working lives.
The White Paper is silent on two issues. One is the size of the European Parliament. I believe that there should be a European Parliament, although I do not think that its powers should be significantly increased. It has an important role and function, but, if enlargement takes place in the Community, it is absurd that it should continue to grow. It already has 670-odd Members; I think that it is already too large. The IGC should decide to "downsize" it.
I realise that there is a problem in relation to Luxembourg, but exceptions can be made. Luxembourg was in at the beginning: it is a foundation member, and its number of Members of the European Parliament should therefore be protected. However, the size of the European Parliament should be capped. Its membership should certainly not be enlarged, and I think it should be gradually reduced. That might also push us, and other countries, into thinking in terms of an alternative voting system for Ministers of the European Parliament that reflects views in this country. I welcomed and played a full part in the Labour party's great win in the last European elections, but clearly Labour's representation in the European Parliament is disproportionate to its electoral vote. Conversely, in 1979, when my hon. Friend the Member for Gateshead, East (Ms Quin) was first elected to the European Parliament, Labour was substantially disadvantaged because of the crackpot electoral voting procedures for the European Parliament. That should be changed and the number of Members of the European Parliament should be reduced. The Parliament is also extremely costly.
There is a danger of the European Parliament becoming an absurd assembly moving between Brussels and Strasbourg. The Government should tackle the nonsense of there being sessions in Strasbourg. The only logical place for it to meet is Brussels, to which Members of this Parliament should have access. I know why the Government do this—

Mr. Marlow: The hon. Gentleman has been speaking for 15 minutes.

Mr. Mackinlay: The hon. Gentleman says that I have been speaking for a quarter of an hour, but he speaks time


after time on Europe and I know what he is going to say—he is like a long-playing gramophone record. Now it is the turn of the hon. Member for Thurrock to have his say on Europe. I want to give a balanced view on the way in which we should proceed. Nevertheless, I take the hon. Gentleman's point, and I promise that, if he does not interrupt me again, I will conclude my speech more quickly.
If the European Parliament was in Brussels, we could go there more and understand more of what is going on. More facilities to travel to Brussels should be available to hon. Members than the one absurd concession a year, which is no good. I want to understand what is going on to be able to probe, examine and check up what is being discussed.
If there is enlargement, we must stop additional languages being made official European Community languages each time a new country joins. It is crazy. In many cases, applicant members that join the European Union will be prepared to use English or other existing official languages. There is considerable language competence elsewhere. Many people in applicant countries can speak other principal languages of the European Union. The cost and the bureaucracy is so absurd that we must say, "Enough." That should be one of the prices of new countries acceding to the European Union.
If those countries find that uncomfortable, we must say to them that, if, after they become members, they want their language to be an official language, they must pay the total cost involved, in addition to their normal contributions to European Union costs. I think they would consider that to be an absurd and unnecessary additional cost, and that is why the number of official languages should now be capped.
The real decisions will have to be taken by my hon. Friends when they are in government. The conclusion of the IGC will mean that a Labour Government will be at the helm. I hope that they will realise that Europe is universally popular in this country, provided that there are no great concessions or that further tranches of sovereignty and this Parliament's capacity to control things are not lost. I hope that they will accept that treaties should be ratified by the House and that they should make institutional arrangements whereby this Parliament can improve its capacity to probe, examine and be proactive on European matters.
Above all, I hope that my hon. Friend the Member for Gateshead, East will acknowledge the overwhelming and legitimate case for central European countries to join the European Union and NATO, which is referred to in the White Paper. That case is compelling. We should recognise it as a moral issue, an obligation and a matter of our own self-interest.

Sir John Cope: I congratulate my hon. Friend the Member for Ludlow (Mr. Gill) on his foresight and on his fortune in instituting this timely debate, which gives not only the hon. Member for Thurrock (Mr. Mackinlay) but me an opportunity to get in a word on Europe. Like him, that is not something that I do frequently, in contrast with some of my hon. Friends.
I agree with the hon. Member for Thurrock about widening rather than deepening the European Union, although I would not go along with all that he said. As to whether the Labour party is federalist or more federalist than the Conservative party or some individuals in it, I draw attention not only to the social chapter but to several other items on the European Commission's wish list, which my hon. Friend the Member for Ludlow set out in detail, and which the Labour party supports.
Those items include the size of the European Commission. Unlike the Government, the hon. Member for Thurrock wants a larger Commission. That should not surprise us. The shadow Government is a good deal larger than the actual Government. There are more appointments in the shadow Government.

Mr. Mackinlay: I am not in it.

Sir John Cope: I know, but more people are appointed to the shadow Government than to the actual Government. That will cause a bit of pain if the Labour party ever forms a Government, but never mind—that is the position.
My hon. Friend the Member for Ludlow quoted extensively from the Commission's wish list at the start of the great process of the intergovernmental conference. I recall the start of the last IGC and the atmosphere then. Many continental politicians thought that Europe would take great leaps towards federalism. They confidently expected that foreign affairs, defence, home affairs and justice would become Community matters in the full sense. The Germans were not just paying by far the biggest share of the Community's costs but happy to do so and to pay more. In effect, no one else except the United Kingdom was making a substantial financial contribution to the Community's costs.
The British Government were therefore faced with considerable difficulties at the start of last IGC, but, as we know, my right hon. Friend the Prime Minister and his colleagues blocked all the worst federalist proposals. They were extremely successful in the negotiations and all the alarmist talk at the beginning was not justified. My right hon. Friend won or reserved the UK's position on all the important points by quietly and firmly saying no and by arguing the case in detail. He did not have a great showdown or walk out; he argued his case in his own effective manner. That is what he will do again with his colleagues.
The White Paper puts the issues and the British position with great clarity and firmness, which is the right thing to do as we approach the IGC. I welcome the fact that it has been published. I am sure that it will be studied carefully throughout Europe in all the Foreign Ministries and that it will be a useful basic document to refer back to as events proceed.
The atmosphere this time is different from that at the beginning of the last IGC. The political atmosphere, the economic background and the financial position have changed. In many respects, the Commission's wish list is not too dissimilar from the wish list of those people at the beginning of the last IGC, but the background is different.
On the political position, obviously, some of the principal characters have left the scene, notably President Mitterrand and Jacques Delors. Chancellor Kohl is still in power, although he escaped defeat by a small margin at the last elections. He has, however, begun to shift his position.


That is evidenced by the speech that is quoted on page 4 of the White Paper and to which reference was made yesterday—one of several speeches in which he has placed a slightly different emphasis.
Recently, the socialists have been defeated in Spain. Since the last IGC, everyone has lived with the problems of ratification—not only hon. Members, who dealt with them at some length, but some of the other countries in the Community, notably France and Denmark. The political background, therefore, is different in relation to Governments and public opinion in Europe.
Economically, the position is also different. Problems of recession have arisen across the Community and are still much more obvious in countries on the continent than in the UK, which is further forward in coming out of the recession and building its prosperity.
It is already becoming absolutely clear that economic and monetary union cannot be achieved in the way envisaged in the Maastricht treaty. Of course, in view of the currency markets, Finance Ministers are bound to keep talking about sticking to the timetable and the criteria—such phrases are still used throughout Europe. The truth is that we cannot do both: we can have a timetable for some sort of union or co-operation if we wish or we can stick to the Maastricht criteria.

Mr. Randall: rose—

Sir John Cope: If the hon. Gentleman will forgive me, I shall not give way as a number of hon. Members wish to speak and time is limited.
We cannot have both the timetable and the criteria, so renegotiation is inevitable. The ultimate proof of that is Belgium, which can never fulfil the criteria within the timetable; it will need decades more. That puts the whole of Benelux in doubt. I accept that, if the criteria were to be waived or altered, it might be possible to proceed on a different basis—but it would be a basis different from that envisaged at Maastricht. Renegotiation will become essential.
The financial position of the Community has changed completely. Germany is the biggest single financier of the Community, but its finances have come under strain since the last IGC and it is extremely conscious of that. Germans are still paying an additional 10 per cent. tax to cover the costs of the reunification of eastern and western Germany. They also have to pay a premium on their bond rates for three or more years because of the possibility that those loans will be repaid in a different currency from the mark. Those considerations will bear harder and harder on, first, the Bundesbank and then on German financial thinking. Germany has become much more reluctant to continue to finance the Community with a more or less blank cheque.
The Dutch are now having to pay heavily into European Union coffers—more heavily per head of population than Britain, I believe. No one is more conscious of that than their Prime Minister, Wim Kok, a former Finance Minister with whom I had to deal during the former British presidency when I was President of the Budget Council.
At that time, the French were beginning to be on our side because their bills were getting bigger. Since then, they have had tremendous difficulties with their economic policy and a change of Government. The socialists were

defeated in the presidential elections—and, indeed, looked like being defeated so far in advance that Mr. Delors withdrew from standing, as he had been expected to do and had appeared to be making moves towards doing. The Italians are having to pay more and are worried about that—and who would not be, given their financial position?
The result is that the whole discussion of EU finances takes place against a background very different from a few years ago. That puts the squeeze on the common agricultural policy.

Sir Teddy Taylor: It is going up.

Sir John Cope: My hon. Friend is right to say that the CAP has gone up; it will do so again. Nevertheless, the different background to Community finances is a lever that will help to reform the CAP. In order to work, any lever needs a fulcrum, which in this case is expansion to include the countries of eastern Europe. We all recognise that it is impossible to widen the Community without reform of the CAP. That is also recognised on the continent and it will lead to reform in due course.
Another aspect is the home affairs pillar. It was and remains important to keep that as an intergovernmental matter. We must build on operational and intelligence co-operation between the police, the customs services and other agencies across the borders—not just within the EU, but much more widely. European terrorism is one matter; European organised crime is another within Europe, but it has a much wider base than that so co-operation needs to be very wide.
The home affairs pillar cannot be put within the framework of the treaty of Rome. No country would entrust the operational control of its police force to that sort of framework, not least those countries with close land borders. Britain is primarily an island, but we have a border between Northern Ireland and the Republic of Ireland. I have some experience of that border and I know how difficult co-operation across it can be. The considerations for the Royal Ulster Constabulary and Ministers dealing with policing matters north of the border are different from those of the Garda and Irish Ministers who must deal with those matters south of the border.
I am not for one moment criticising the co-operation we received from the Irish; on the contrary, we had some very good co-operation for much of the time. However, their operational considerations were different from ours—and, sadly, still are. That is one, admittedly acute, example of the differences in policing either side of a land border. A sea border makes it easier, but there are land borders across most of the continent. As part of the changed atmosphere, countries have had to face the increasing problem of immigration and asylum seekers, and nowhere more so than Germany.
I want to say a few words about referendums. Sir James Goldsmith, a French Member of the European Parliament, has written to many of us calling for a referendum in Britain on the Maastricht treaty. It is far too late for that. Whatever the arguments were for such a referendum, they were made some time ago. Much of the outcome of the Maastricht negotiations was, in any case, favourable. If there were a referendum, the voters would have to consider all sorts of matters, both favourable and otherwise. It would be difficult to frame a question on the Maastricht treaty as a whole.
It is quite different to talk about a future referendum on a single currency, but that is not what Sir James is calling for in his letter. If ever a single currency became reality—I have already expressed doubt about that—it would be a long way off. It will be the result of many complex considerations at that time. It may be desirable to hold a referendum before clinching the matter because undoubtedly, as my right hon. Friend the Prime Minister has made clear, it will have political and constitutional implications. Given that we do not know how negotiations will go, except that they will not follow the pattern set out at Maastricht, I see very little point in a more firm opinion being given at the present time.
All in all, the White Paper is very positive. It sets out a practical approach to the IGC, which I welcome. The tide of opinion is running in the same direction on the continent as it has been in this country, to a much greater extent than before. We are therefore well placed to get a good result from the IGC.

Sir Russell Johnston: From where I stand, the approach of the hon. Member for Ludlow (Mr. Gill) is wholly negative, and compares, as the European Commission said, predictably with the Government's largely negative White Paper. I am getting rather tired of all this rubbish about hidden agendas. I have fought nine elections and never concealed my belief in a federal Europe. It is simply not true that we engage in all sorts of fancy scheming. I say positively and clearly that I do not fear a federal Europe; it is an ideal to which I aspire.
The hon. Member for Ludlow opened his speech with a few remarks on the single currency, which will not, as we know, be dealt with at the intergovernmental conference. I agree with him that it is, however, behind the whole argument. Perhaps he has not noticed the most recent information about business attitudes to a single currency. A report published earlier in the year by Coopers and Lybrand found that 57 per cent. of British businesses favoured a single currency. The hon. Gentleman might take that into account. A single currency and a single market are no more than common sense, and business men, many of whom support his Government, clearly recognise that. I doubt very much that business men in Ludlow think differently from those anywhere else. They may simply like the hon. Gentleman and thole his eccentricities, but he should not assume that they all agree with him. I am sure that they do not agree with the hon. Member for Northampton, North (Mr. Marlow).

Mr. Gill: Does the hon. Gentleman think that there is any significance in the pronouncements of Professor Otmar Issing, who, as he knows, is a director of the Bundesbank? He is apparently on record as saying that monetary union could destroy the European Union.

Sir Russell Johnston: I have just visited the Federal Republic of Germany. That view, if it is quoted accurately—I have a feeling that it is somewhat out of context—was not held by any part of the German political establishment, including the Social Democratic party.
One passage of the speech of the hon. Member for Ludlow reflected the weakness and the negative nature of the Euro-sceptic attitude. I do not think that there is a

Euro-sceptic case at all. The hon. Gentleman—I do not think that I am quoting him accurately, but he is present and can correct me if I am wrong—said that the Government should challenge and confront rather than compromise and reconcile at the IGC. If it is necessary, he said—there was an intervention at that point—they should walk out. Such rigid, confrontational politics is bad and one of the major weaknesses of the British political system. It is reflected in the House and maintained by an unfair and undemocratic electoral system. I am therefore afraid that I do not think that that is a good way in which to approach anything.
The right hon. Member for Northavon (Sir J. Cope) quoted Chancellor Kohl and said that he thought that his attitude was changing. I had an hour with Chancellor Kohl on Monday night and saw absolutely no evidence of such a change. He was still very much convinced that the only sensible thing for the European countries to do was to come closer together. He could not understand the arguments for pulling the countries apart, creating difficulties and erecting barriers. He wanted barriers to be broken down.
I also had the opportunity to speak with others in the Federal Republic's political establishment and one thing that struck me forcefully was their desire to adhere to the economic and monetary union timetable. Personally, I share the views of some that it will not be possible to adhere to such a timetable for a variety of reasons, mainly because the criteria will probably not be met by a number of countries. Nevertheless, I was rebuked quite properly by the chairman of the Christian Democratic Union, who said that if I began by thinking that the timetable could not be met, it never would be met. I had to admit that that was perfectly good logic.

Sir John Cope: I apologise for interrupting the hon. Gentleman. A quotation of Chancellor Kohl—he has said similar things on other occasions—is repeated on page 4 of the White Paper, in which he says to the Bundestag:
We do not want a centralised European state that subsumes regional, national and cultural traditions or dismisses historical experience.
I do not think that he would have said such things a few years ago and that led me to make my remarks.

Sir Russell Johnston: With great respect, that is completely untrue. Kohl has been saying such things all along; that is his view of federalism. I remember him making a speech at Edinburgh university when he was given an honorary doctorate about six or seven years ago, in which he said that we would have unity in diversity, a federal, decentralised Europe—not a centralised Europe. Kohl has always believed that. It is strange—almost self-inflicted and blind—how many people consider federalism as if it were centralisation; it is not. We gave Germany a federal system because we wanted it to be decentralised. That is why it happened.
I shall conclude because I gather that there is some kind of pact between the two Front-Bench teams that they should deliver of their wisdom shortly. I would not want to prevent that. I shall make four quick points. We believe that qualified majority voting should be extended and that there will not be effective reform of the common agricultural policy, the environment and other matters unless it is. QMV will become even more important if there is enlargement.

Sir Teddy Taylor: Agriculture has majority voting already—now, today.

Sir Russell Johnston: Not in all cases.

The Minister of State, Foreign and Commonwealth Office (Mr. David Davis): I have checked it out and discovered that 98 per cent. of decisions on the CAP are taken by majority voting.

Sir Russell Johnston: I accept—[Interruption.]

Mr. Deputy Speaker (Mr. Michael Morris): Order.

Sir Russell Johnston: I accept that the majority of decisions are taken by QMV, but, still, some are not.
The hon. Member for Thurrock (Mr. Mackinlay) said that he wanted the Visegrad countries to join the European Union as quickly as possible. That will be hellishly difficult. Poland, for example, with its textiles, steel and agriculture, could not be taken in before the common agriculture system was reformed. I do not see any great advantage in extending NATO at the moment if its consequence is to alarm Russia. That would not necessarily be a good thing.
Finally, one of the things that we shall have to do very soon is to reform the method of financing the Community. The Germans all said the same. Simply going on with the present system, including the British rebate, is unsatisfactory. We must develop a system that relates capacity to pay more directly to the contribution made. The Government would do us all a great service if they bent their mind in that direction.

Ms Joyce Quin: I can assure the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) that, rather than there being some sinister pact, I expect to have the same amount of speaking time as he had. I congratulate the hon. Member for Ludlow (Mr. Gill) on his good fortune in winning the ballot and on being able to introduce this subject—but I am not sure whether all his right hon. and hon. Friends will congratulate him in the same way. However, as my hon. Friend the Member for Thurrock (Mr. Mackinlay) said, the debate is a curtain-raiser for our debate on the White Paper next week.
I was intrigued to hear whether the hon. Member for Ludlow would be pleased with the White Paper that was presented to the House yesterday. The fact that it appeared at all is something of a victory for the hon. Gentleman and his fellow Euro-rebels, because the Government did not originally want to produce a White Paper. None the less, I am sure that much in the document is a disappointment to him. Indeed, at times he described it as "modest" and said that it did not go far enough.
Later in the hon. Gentleman's speech, he seemed to recommend that, if the Minister did not get his way, and did not manage to go even further than the White Paper, he should walk out of the intergovernmental conference. The hon. Member for Inverness, Nairn and Lochaber talked about hidden agendas. There may be one behind the words "walk out"—that is, withdraw.

Sir Teddy Taylor: indicated assent.

Ms Quin: The hon. Member for Southend, East (Sir T. Taylor) obviously agrees with that hidden agenda. It has been behind much of what we have heard this morning.
The White Paper is a strange document, in that it alternates between positive and negative sentences. It is clearly designed to try to appeal to two very different audiences. Its schizophrenic approach is evident in the section that deals with the European Court of Justice. In paragraph 36 we read:
The Government is committed to a strong independent Court without which it would be impossible to ensure even application of Community law, and to prevent abuse of power by the Community institutions.
At the same time, the White Paper makes an attempt to respond to some of the objections to the recent court decisions about which the hon. Member for Ludlow and his colleagues feel so strongly.

Mr. Marlow: The position is very straightforward. There are some things that Europe has agreed to do, on which the court should adjudicate, and there are some things that Europe has not agreed to do, concerning which the court has acquired powers to itself to make political decisions that should be made in Parliaments within the Union, not by the court. What the Government seek to do, in which we wish them success, is to ensure that the court concentrates on the areas with which it has the proper authority to deal.

Ms Quin: We feel that, in many the cases, some of which were mentioned by my hon. Friend the Member for Thurrock, the court has acted properly. What is straightforward is the split within the Conservative party on the issue. There are some court judgments, whether made by national or by European courts, with which people agree and others with which they do not agree. The Government should be careful about what they propose, because they might end up with a worse situation.
In the White Paper the Government suggest that
a Member State should only be liable for damages in cases of serious and manifest breach of its obligations".
That could prove a hostage to fortune, because we want many other countries to abide by the obligations that they have entered into. The Government must think the problem through more carefully than they seem to have done so far. We have much to gain if other countries fulfil their obligations, especially on internal market matters.
Finally on the European Court, will the Minister confirm that, when he raised the question in the reflection group, he got no support from any other country? In that case, how does he expect to deliver on the attempts outlined in the White Paper?
One reason why Conservative Members do not like judgments by the European Court is the fact that many of them relate to social matters. Although in his statement yesterday the Foreign Secretary said that he would maintain the Government's commitment to the opt-out from the social chapter, which would not end during their no doubt short-lived existence, it is clear from what has been said, both by the hon. Member for Ludlow and by others in interjections, that the so-called Euro-rebels do not believe


in the value of the opt-out. They clearly think that there are other ways, via other parts of the treaties, in which various social measures can be applied across the European Union.

Mr. Marlow: Will the hon. Lady give way?

Ms Quin: No, I shall not give way to the hon. Gentleman again. I have already given way to him once, and I have little time left.

Mr. John Sykes: Will the hon. Lady give way?

Ms Quin: I shall give way to the hon. Member for Scarborough (Mr. Sykes), but this will be the last time.

Mr. Sykes: I am grateful to the hon. Lady for giving way and indulging me. Is she aware that, in my constituency, there is a large company that could not afford to build a factory in France because of the social chapter and the minimum wage and that, as a result, it doubled its production in Scarborough? How would she answer that?

Ms Quin: By referring the hon. Gentleman to the speech recently made by President Chirac, in which he said that, these days, France is taking the lion's share of United States investment in the European Union. France is now second to the United Kingdom in terms of inward investment. That change has happened in recent years and it shows that, whatever the reasons are for inward investment going to particular countries, they have nothing to do with the social chapter.
That fact was confirmed to me by some of the Japanese firms that have invested in the United Kingdom. Perhaps the hon. Gentleman would like to read the evidence given to the Employment Committee by the personnel director of Nissan, who said that the social chapter had no influence in its decision to invest in the United Kingdom.
Yesterday, the Foreign Secretary made a rather strange claim about subsidiarity, which I would like the Minister to address in his reply. We all agree that subsidiarity is a good principle, but yesterday the Foreign Secretary claimed that the United Kingdom had introduced that vital concept into the Maastricht treaty. My understanding is that that is not the case.
Subsidiarity already existed, under article 130S of the Single European Act. Treaty buffs will know that that is in the section of the Act that relates to the environment, which talks about working out which decisions should be taken at EU level and which should be taken at other levels. The concept of subsidiarity is not unique to the British Government and their approach to the European Union. Perhaps the Minister will say something about that.
The hon. Member for Ludlow and his Euro-rebel friends said that they wanted the power of the European Union to be cut. I have a feeling that the White Paper does not offer them anything like enough in terms of cuts in EU power. Perhaps the Minister could also address that point.
My hon. Friend the Member for Thurrock rightly stressed the importance of the enlargement issue—something about which I feel strongly and passionately.
Having encouraged the changes in central and eastern Europe, we have a moral, political and economic responsibility to make our relationships with the countries there a success, and to bring them into as close an arrangement for membership of the European Union as we can, as quickly as we can. Continued enlargement should not be regarded only as a problem, which it is often presented as being, but as an exciting opportunity.
There is not much vision in the White Paper. The Government mention enlargement, but not its exciting possibilities. They mention common agricultural policy reform, but express no specific ideas about the reforms they want. If they had suggested that we should reform the common agricultural policy to improve its impact on the environment and to try to make it more helpful to developing countries outside the European Union, that would have been welcome. The Government have blocked a welcome move to tackle the problem of racism and xenophobia at European level. We feel strongly about that omission.
The White Paper is a desperate attempt to please two different audiences. It is a thin document. Is will not win the Government friends in their party, in the country, or among our European partners.
I should like, finally, to refer the Minister to an article in the press this week by the former Foreign Secretary, Lord Howe. He said that the Government's approach to the European Union
has engendered the view in European capitals that it will be difficult, if not impossible, to do serious business with the UK this side of the general election.

The Minister of State, Foreign and Commonwealth Office (Mr. David Davis): I start by congratulating my hon. Friend the Member for Ludlow (Mr. Gill) on obtaining this debate, and at such an appropriate time. It will fall neatly between yesterday's statement by my right hon. and learned Friend the Foreign Secretary on the White Paper on the intergovernmental conference and the full debate on 21 March 1996.

Mr. Mackinlay: Only one day?

Mr. Davis: Yes. I do not have to debate the business of the House with the hon. Gentleman. I shall come to one or two of his points later.
I shall try to concentrate on points that were not covered yesterday and those made by my hon. Friend the Member for Ludlow, and if we do not cover them all today perhaps we shall pick some up later.
I wish to dismiss almost out of hand the comments of the hon. Member for Gateshead, East (Ms Quin). They were a mixture of three not very desirable things. The first was ignorance. The White Paper was written in response to a request from three Select Committees, and the hon. Lady should have known that, especially as I told her in European Standing Committee B only the day before it was announced. Secondly, Labour policy is partly a lame shadowing of our policy when the Labour party is too afraid to have a view of its own. Thirdly, it is a pathetic wriggling on hooks—

Ms Quin: Will the Minister give way?

Mr. Davis: No, I shall not. The hon. Lady has already taken enough time.
It is a pathetic wriggling on hooks that the Labour leader has impaled the hon. Lady on in moments of Europhoria.
On the social chapter, the hon. Lady took an intervention from my hon. Friend the Member for Scarborough (Mr. Sykes). She admitted that France was second, not first—we are first—in terms of inward investment. She should read some of the French press of recent weeks, such as Le Monde recognising for the first time that perhaps France should learn from the British model in generating employment. Perhaps she should have seen "The Money Programme" earlier this week, in which several German business leaders spoke about the need for Germany to adopt the British model of deregulation and employment creation.

Mr. Barry Sheerman: rose—

Mr. Randall: rose—

Mr. Davis: I shall not give way.
Modern Europe is based on the concept of nation states. The nation state attracts the allegiance, affection and pride of its people. People's sense of identity derives principally from their sense of nationhood. Any democratically elected Government must base their policies on that clear political imperative and act first and foremost in the people's interest.
Our membership of the Union has delivered important benefits. From within the Union we have been able to lead the drive for a European market that is open internally and which we intend to open to the rest of the world. European Union membership has been crucial to attracting inward investment to this country. The European Union is a major force for peace and stability in Europe.

Mr. Mackinlay: That is right.

Mr. Davis: The hon. Member for Thurrock (Mr. Mackinlay) made some good points about that. It is in the context of the Union that we shall be able to heal the divisions of the cold war on our continent. The enlargement of the EU is an historic responsibility for Europe and a long-term British interest.
My hon. Friend the Member for Ludlow is right that the Union will remain a force for prosperity and security only if it is a Union that people feel comfortable with. That means remaining truly a partnership of nations based on consent, freely given, of its members.

Mr. Randall: Will the Minister give way?

Mr. Davis: No, I shall not. If the hon. Gentleman will forgive me, I have very little time to answer most of the points made by my hon. Friend the Member for Ludlow.
No change should be brought about by dogmatic beliefs or zealous pursuit of some remote, unjustified or unaccountable centralism. If the need for change is not clearly demonstrated, change should be avoided. That is the basis on which we approach the IGC. The European

Union should concentrate single-mindedly on what needs to be done at a European level and doing it well, and not interfering where it is not needed.

Mr. John Wilkinson: Will my hon. Friend give way on an important point?

Mr. Davis: If my hon. Friend is very fast.

Mr. Wilkinson: The Foreign Secretary rightly referred to President Santer's observation that the European Union should do "less but better". Cannot the British Government hasten that process by seeking to recuperate powers to this country at present undertaken by the European Union so that it can indeed do less?

Mr. Davis: I recommend that my hon. Friend reads the items on page 12 of the White Paper on limitation of powers and some passages about common fisheries. I shall discuss some of those points specifically later.

Mr. Randall: Will the Minister give way?

Mr. Davis: If the hon. Gentleman will forgive me, I have five minutes to make several points.

Mr. Sheerman: The Minister just gave way to someone who just walked into the debate.

Mr. Davis: The hon. Gentleman is wrong. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) was here at the beginning of the debate.

Mr. Sheerman: Oh no he was not.

Mr. Davis: Oh yes he was. I shall continue my point, if I may, Mr. Deputy Speaker.
Of course, many member states are still attracted to elements of a federal vision for Europe. We have heard that the Liberal party is also attracted to it. My hon. Friend the Member for Ludlow outlined the views of the Commission in that respect, and they are not a bad proxy for several of those member states, as is demonstrated by the Benelux position taken last week, so we obviously have something quite difficult to deal with.
We still encounter the school of thought that says that the answer to popular disenchantment with Europe is more Europe. That is reminiscent of the Socialist party in the 1980s, when it was beaten in the elections, saying that the answer was more socialism. That view was as wrong then as this view is for Europe now.
Our approach to the IGC, set out in the White paper, will have to contend with the committed federalist positions of many of our partners, so there is a hard pounding ahead in the negotiations, but I am not as pessimistic as my hon. Friend the Member for Ludlow about our chances of success. We have force of will on our side. We have a constructive and coherent approach, backed up by solid and convincing arguments. In many ways, the flow of events is on our side; that point should not be ignored.
Another factor is on our side. As my right hon. Friend the Member for Northavon (Sir J. Cope) said in his excellent speech, all over Europe, people are expressing unease about the direction in which the European Union


is going. Support for the Union is falling. It is our duty to stand up for those people, articulate their anxieties and develop constructive solutions to promote their and our interests.
My hon. Friend the Member for Ruislip-Northwood said that Mr. Santer had espoused a view of "less but better". That is an accurate description of what we want to do first.
My hon. Friend the Member for Ludlow mentioned monetary union. That issue will not, or is unlikely to, come up at the intergovernmental conference. That does not mean that we shall be inactive on it. My hon. Friend witnessed the actions of the Prime Minister with respect to the ins and outs and the real problems that monetary union already poses to the single market.
I do not intend to intervene in my hon. Friend's correspondence with the Economic Secretary—I am sure that she can put the Government's case pretty well—but I say more generally that many of our fellow Europeans regard monetary union as a stepping stone to political union, and for that reason alone we must be hawk-eyed about it. A wide variety of people—such as Otmar Issing, who was mentioned by my hon. Friend, Ralf Dahrendorf and Bernard Connolly, for that matter—have expressed the view that EMU could break up Europe. Those people represent a wide spectrum of opinion, and there are many points of view in between, but that spectrum reinforces the wisdom of my right hon. Friend the Prime Minister's position in maintaining the opt-out for Britain while maintaining influence over the outcome of events. The range of possibilities is exactly why that is the right position to take.
I have only a minute to answer my hon. Friend's other points. At the beginning of this week, I had the pleasure of seeing him on television, asking, "Where's the beef?" in the White Paper. It was appropriate that he should ask that question. Afterwards, I went through his document—his green paper, as he called it. We drew up the policies in the White Paper in the course of—

Mr. Deputy Speaker: Order. Time is up.

Fire Services

11 am

Mr. John Austin-Walker: I make no apology for this being the fourth occasion in as many weeks on which I have raised my concerns about the fire service. On previous occasions, those concerns were related to the situation in London. Today I wish to widen the debate in view of the fears expressed by other hon. Members about the situation in their constituencies.
We now seem to be embroiled in an annual ritual fight over budgets for fire brigades: a fight to save fire stations, to save fire engines on the road, to save firefighters' jobs and, ultimately, to save lives. Implementation of the proposed fire service cuts will cost lives that the firefighters are there to protect and also the lives of firefighters themselves.
Earlier this year, hon. Members received a letter from Dennis Davies, president of the Chief and Assistant Chief Fire Officers Association, in which he stated:
The fire service is facing a serious financial situation which needs to be remedied if it is not to create major operational difficulties.
Mr. Davies, who is chief fire officer for Cheshire, said that current expenditure in real terms on the fire service exceeds formal allocations, as expressed in the revenue support grant, by about £80 million. He said in his letter:
To date the service, locally managed through Fire Authorities although substantially centrally funded, has sought to keep its quality by internal changes and innovation.
He added, however, that a crisis had been averted in many cases because
local government has consistently placed Fire higher in the list of local service priorities, often to the detriment of other services.
The Under-Secretary of State, the hon. Member for Leeds, North-East (Mr. Kirkhope), agreed with that point when he said in a reply to the hon. Member for South Worcestershire (Sir M. Spicer) that
a shire county is not limited in its spending on its fire brigade by the fire service share of its SSA. What matters is the overall SSA for the county council. It is for the county council to decide its priorities for spending across all its services."—[Official Report, 29 November 1995; Vol. 267, c. 1175.]
So there we have it from the mouth of the Minister. Fire cover can be maintained in the shire counties, despite underfunding, by cuts in education or social services. The hon. Members for Wyre Forest (Mr. Coombs) and for South Worcestershire were rightly concerned about the possible risks to their areas from the proposed closures of Beudley and Pebworth, the halving of staffing at Kidderminster, the reduction in the number of appliances and the removal of a hydraulic platform.
Principal fire officers have instituted countless reviews and embraced many new ideas. The Audit Commission has also conducted an in-depth review. It is now estimated that that review will result in only £7 million savings from improved performance, whereas the initial optimistic forecast was for £67 million. Either figure would leave the service with a substantial shortfall.
I share Mr. Davies's concern that, despite routine local reporting of fire service difficulties and the generally held belief that our communities should be safe, the fire service predicament has not yet reached the national consciousness and we have not yet had a national debate. I hope that today's debate will lead to a full national debate.
Fire services have a responsibility to comply with operational standards set by the Home Office. Increasingly, however, performance to minimum standards—measured, in the case of the fire service, by speed of attendance at the scene of a fire—has become the acceptable quality standard. Attendance times are important—they can mean the difference between life and death—but as the Chief and Assistant Chief Fire Officers Association said,
achieving a fast arrival is just the beginning of our task.
What real value is there in the fast arrival of an ill-equipped or ill-trained fire crew?
The current situation—and this trend is accelerating—is that the absolute need to ensure a fast response is taking money from training, vehicle replacements, equipment purchases and public education and prevention programmes. The association has warned that the fire service—which needs technical development to meet more complex hazards, with better information systems and personal protection—is short of basic capital investment, that new skills training is stagnating when it should be growing and that research into better options for public protection is slowing down.
Last month, firefighters from Tyne and Wear came to Parliament to spell out the consequences of the £2.3 million shortfall in their 1996–97 budget to hon. Members.

Mr. Chris Mullin: I am grateful to my hon. Friend for mentioning Tyne and Wear. As I believe he knows, we are faced with losing, through natural wastage, 92 front-line firefighters. That is bound to have an impact on a service which has always received the auditors' approval for its cost-effectiveness.

Mr. Austin-Walker: I certainly take that point. The loss of 92 firefighters' jobs and the loss of five firefighting appliances in my hon. Friend's area will obviously affect public safety.

Mr. Mullin: It is seven appliances.

Mr. Austin-Walker: I stand corrected. Those losses are happening in an area in which three members of the public died in a fire after a fire station less than one minute from their home had been closed.
The problem does not exist only in urban and inner-city areas. In Scotland, many rural areas may be left to burn when stations in Balmoral, Gordonstoun, Rothes, Cullen, Banff and Kintore are closed. When a firefighter lost his foot, the fire authority concerned was criticised by the court for inadequate training; yet the current funding levels will mean further cuts in training for firefighters.
The Government's approach to the fire service has been typical of their approach to all public services: they want to know the cost of everything but recognise the value of nothing. The Fire Service college is a case in point. That former centre of excellence and one time world leader has been reduced to agency status, and profit rather than professionalism has become the priority. Throughout Britain, firefighter training has been restricted as a result of understaffing and underfunding, and many brigades can no longer afford to send staff to the Fire Service college.
The key issue is insufficient total funding of the fire service, and the situation is bound to worsen due to the effects of the pensions time bomb. Eighteen months ago,

in the debate on the Queen's Speech, I drew the Minister's attention to the problem facing the London fire authority and warned that unless that problem was dealt with, there was a
real prospect that we face dramatic cuts in the cover provided by fire and civil defence authorities in the next financial year."—[Official Report, 18 November 1994; Vol. 250, c. 293.]
In the debate on 9 February this year, I pointed out that in London the fire authority is already devoting 19 per cent. of its budget to pensions. I further stated:
The estimate of the pension requirements in 1996–97 is £45 million. The calculation in the SSA is £41 million—a difference of £4 million".—[Official Report, 9 February 1996; Vol. 271, c. 630.]
Nationally, it is estimated that in 10 years' time employers' contributions to the pension fund will absorb 25 per cent. of total fire service revenue expenditure. In London, the 25 per cent. level will be reached by the year 2002 or 2003. Throughout the country, the result of the Government's financial settlement will be a loss of hundreds of operational posts and a virtual freeze on recruitment. That will inevitably exacerbate the pension problems as fewer firefighters will be contributing to the pensions of more retired firefighters.
The Minister tells us that authorities have reserves or that further savings can be made, but it has already been shown that the efficiency savings identified by the Audit Commission are more likely to yield only £7 million rather than the £67 million hoped for by the Government. Services have already been pared to the bone. The Government claim that that is political posturing by Ken Cameron and the Fire Brigades Union, or by Councillor Tony Ritchie of the London fire authority, but the truth is that anyone who knows anything about the fire services holds the same view.
Mr. Clarkson, the previous chief fire officer for London, is on record as having said that he had already cut the service to the bone and that there was no more room for cuts. He is not a member of the Fire Brigades Union, and he is certainly not a member of the Labour party. It was revealed by my hon. Friend the Member for Lewisham, East (Mrs. Prentice) in a debate on 1 February that Mr. Clarkson is in fact a Conservative nominee for the police committee in Kent.

Ms Margaret Hodge: Does my hon. Friend agree that the loss of 15 fire appliances from the capital is particularly absurd at a time of threats of disruption from bombs and that it is particularly inappropriate that as we develop the site for the millennium festival in Greenwich the two stations next to that site are to lose fire appliances? Does he further agree that Londoners would prefer to pay 4p per week and feel secure in the knowledge that they have a good fire service rather than face the cuts imposed by the Government?

Mr. Austin-Walker: I agree with my hon. Friend. I am intimately concerned about Greenwich, which is in a neighbouring constituency. It is true that East Greenwich fire station, which is east of the millennium site, is to lose an appliance, as is Deptford fire station, to the west of the site, which is eventually scheduled for closure. That problem in London must be addressed.
The major difficulties faced by the fire authorities stem from the local government settlement for the current year and the next. Last year's settlement, which was generally


accepted to be one of the most difficult on record, meant a planned overall increase of 3.3 per cent. in public expenditure, whereas most local authorities were required to manage budget increases limited to 0.5 per cent. No increase in provision was made for the fire service and the spending caps remained screwed down. The 1996–97 settlement shows little change, with an increase of just 1.5 per cent.
I accept that the SSA formula now includes a pensions element, but that is not the same as injecting additional money to cover costs. Nationally, the settlement for 1996–97 represents a cut in real terms of £70 million. That is the shortfall between actual budgets and the settlement. In London, that means a gap of £7 million. The 1995–96 budget of £258 million would need to be increased to £266 million to maintain current levels of service—a service already "cut to the bone", in the words of a former chief officer.
Some rather over-enthusiastic prospective Conservative parliamentary candidates in London, worried by the growing tide of public anger at threats to their fire stations, swallowed whole the propaganda from Tory central office. Those candidates were ready to rush into print in their local newspapers to say that it was all the fault of a wicked plan by a Labour-controlled authority which could not manage its finances. If only, instead of relying on the provenly unreliable central office machine, they had consulted their own Tory colleagues on the London fire authority. They should have read the letter, jointly signed by the leader of that authority, the leader of the Conservative group, Councillor Adrian Fitzgerald and the leader of the Liberals, Councillor Rowlands. If those candidates had consulted Tory councillors on that authority, they would have realised that the statements made by Baroness Blatch in her letter to hon. Members were at best misleading and that the document from Tory central office was a total distortion of the facts.
I regret that the SSA formula does not measure real fire cover needs. It is important to consider risk categorisation. Attendance times—and hence resources—are based on that categorisation. I welcome the comments of the Audit Commission in its report of last year, "In the Line of Fire". The categorisation of risk dates back to the days when insurance companies ran the fire service and graded their risks on the basis of property liability and not the saving of lives.
Many modern buildings incorporate sophisticated fire prevention and detection features, something which is absent from most inner-city and urban homes. It is in densely populated urban areas, however, that most deaths occur. Under the Government's categorisation of risk, most urban areas of terraced, detached and semi-detached housing and blocks of flats are categorised as C risk. That means that one fire engine should be sent to arrive at a fire within eight to 10 minutes. I believe that the current level of service in London is appropriate. The fire authority treats a domestic fire in a C risk area as one in a B risk area, where policy dictates that two appliances should be sent—one to arrive within five minutes and the second within eight minutes. There have been countless instances in London in which the lives of members of the public and of firefighters would have been lost if just one appliance had been sent to a house fire and arrived within 10 minutes. In some of the outer areas of London,

including parts of my constituency, properties are categorised as D risk—which means that one fire appliance is sent, to arrive within 20 minutes. Thankfully, it is the policy of the London fire authority, supported by Conservative councillors on that authority, to send two appliances to any house fire.

Mr. Nigel Spearing: I am extremely grateful to my hon. Friend for his comprehensive account. Can he tell me whether an arrival time of 20 minutes is sanctioned by the Home Office?

Mr. Austin-Walker: I regret to say that it is.
The Minister of State replied to my Adjournment debate on the fire service on 9 February and the Under-Secretary of State for the Home Department, the hon. Member for Bolton, West (Mr. Sackville), replied to a debate initiated by my hon. Friend the Member for Lewisham, East on 1 February. Both Ministers said that the London fire authority could make cuts and still meet the Home Office's recommended attendance times, and they were probably telling the truth. The Under-Secretary of State quoted the authority's report, which said that the reductions could be made
without affecting the Authority's ability to meet Home Office recommended times.
What Ministers did not admit, however, is that that guarantee represents a dramatic reduction in service. Following the intervention of my hon. Friend the Member for Newham, South (Mr. Spearing), I ask the Minister whether he thinks it reasonable that a fire in a flat on the Glyndon estate in Plumstead should be responded to by one fire engine, arriving in 10 minutes, without any further back-up. If he does, I must tell him that lives will be lost. The later an appliance reaches the scene of a fire, the greater the risk to the building and to any occupants, and the later a firefighter arrives, the greater the risk to him or her from flames, suffocation or falling debris—as in the case of Fleur Lombard.
Cheshire's chief fire officer makes the point that fast arrival is just the beginning; what then comes into play is the equipment, the back-up and the fact that the crews are well trained. A fire dealt with at its inception is much easier to extinguish than one that has taken hold. That makes sense financially, too, as resources are tied up for less time, allowing other incidents to be dealt with. If the fire gets worse before an engine arrives, the crew will be there much longer and will be unable to respond to other calls. If a crew turns up and there are people to be rescued, it can usually rely on the second crew to do resuscitation and first aid. The first few minutes are vital.
The health and safety of crews is also at risk when just one appliance is used and approved procedures have to be ignored. Imagine a fire on the 20th floor of one of the blocks on the Glyndon estate. The five firefighters have to take into the building two lengths of hose, two sets of breathing apparatus, one branch, one adaptor, one breathing apparatus control board, one dividing breach, one radio, breaking-in gear, a first aid kit, one or two axes and a resuscitator. The officer in charge must stay downstairs to implement command and control; the driver operates the pump to ensure that the water gets upstairs and another firefighter will set in the hydrant and dry riser to allow the passage of water. That leaves two firefighters to carry all that equipment. There is no breathing control officer and no one to carry out first aid.
Such is the result of a one-appliance response, with which the Minister seems quite content. Does he believe that a one-appliance response within 10 minutes is adequate in such a situation? That is, after all, the Home Office minimum standard. Minimum standards should be a safeguard for the public. Instead, those standards are being used as a lever to cut spending. As the screw tightens, either the service copes, but at a cost in terms of quality, reliability and morale—the lowering of any one of which puts lives at risk—or a major disaster occurs. It has not yet happened on a large scale, but any fire officer can cite one example after another of instances in which the outcome could have been disastrous. Every turn of the screw brings us closer to that disaster.
In the debate on 9 February, I compared two incidents in Woolwich. One took place when Shooters hill fire station had two appliances, and the other when it had one. In the first, four people in Rowton road were saved. In the second, in Llanover road, four people died; I do not claim that they would have survived if two appliances had been available, but it remains in the minds of everyone involved in that incident that a second appliance might have made all the difference.
As I have said, some parts of Woolwich are categorised as D risk. The Minister believes that it is reasonable for a fire in property there to be dealt with by one engine, arriving within 20 minutes. Thank goodness a Labour councillor and not the Minister is in charge of the London fire authority.
I speak with experience of London, but there is a nationwide crisis. In Greater Manchester, budget reductions have averaged £1 million a year over the past two years. Vacant fire safety officer posts have remained unfilled and repair and maintenance work has been reduced. Tyne and Wear has had to take off two front-line fire appliances and suspend its safety education programme. West Midlands has had a £4.6 million budget cut, with major cuts in training and no capital available for replacement fire stations. South Yorkshire has a shortfall of more than £1 million and the district auditor has warned that reserves are at the minimum acceptable level, so there is no possibility of their being available to help support the budget in future years.
The crisis is not only in London and the metropolitan areas; it is nationwide. I could give endless examples of cuts in services being made by brigades in county areas. In the home counties, there will be no minor works, no provision for information technology or for fire safety work as set out in the Audit Commission report, and 50 per cent. cuts in training at the Fire Service college. In the north-west, there are no resources for hazard management to deal with chemical spills and fires, and fire safety officer inspections have been reduced.

Mr. Andrew Miller: In my constituency in the north-west, there is a category A fire risk in close proximity to Victorian housing. Does my hon. Friend agree, given such situations, that the cuts—which are spread across the country as he has described—typify the way in which the Government are mismanaging the situation? If we do not do something about that as a matter of urgency, the "What happens if …" question that arose from the Associated Octel fire last year will hit us very seriously.

Mr. Austin-Walker: I share my hon. Friend's concerns. I know that the Cheshire area has several establishments

which use hazardous industrial processes and chemicals. I agree about the potential danger, which I shall come to because there are some risks with which fire authorities have to deal for which there is no adequate recompense or any funding arrangement. They include dealing with spillages of hazardous chemicals. Fire brigades are effectively funded only to deal with fire operations.
In the south-west, there have been reductions in essential training and community fire safety units have been abolished. I mentioned earlier the cuts in Scotland. The list goes on and on, and it makes depressing reading.
Capital funds are an essential part of fire service development. I live in Thamesmead, a new town built on the Thames marshes. No additional fire cover has been provided for it, although a dedicated fire station was once promised. When I complained, Baroness Blatch replied that it was nothing to do with her but a matter for the authority—yet she controls the authority's capital expenditure.
For the London fire authority, the basic credit approval for 1996–97 has been set at £5.5 million—£3 million less than for the current year—nearly halving the authority's capital programme so that it is unable to sustain the level of investment needed in vehicles and equipment without reductions in appliances or crews. On Merseyside, the credit approval is £2.1 million against a requirement of £3.5 million. The money available for vehicles is less than a third of what is required.
If we take the figures for all fire and civil defence authorities, basic credit approvals have been cut from £23 million in the current year to £15 million in the coming year—a decrease of almost 35 per cent. for Greater Manchester, Merseyside, South Yorkshire, Tyne and Wear, West Midlands, West Yorkshire and London.

Mr. David Hanson: What my hon. Friend describes is common in north Wales. We have had a major cut in the capital programme. On top of all that, local government reorganisation has reduced the number of fire services from eight to three and created additional difficulties that have not been recognised by the Government.

Mr. Austin-Walker: My hon. Friend points to the fact that several factors are not fully taken into account in calculating a fire authority's spending needs. They are certainly not adequately taken into account in the standard spending assessment.
I shall briefly describe the background to the cuts. In the 10 years from 1983 to 1993–94, the operational establishment in fire services in Great Britain went down from 40,000 to 39,438, while fire calls rose by 28 per cent. and false alarms rose by 116 per cent. Calls for special services went up by a staggering 82 per cent. Special services include attending road traffic accidents and releasing trapped people; releasing people trapped in lifts; dealing with spillages of hazardous chemicals; pumping flood water out of premises and similar services. However—wait for it—the Government do not take account of any of those services in deciding funding for fire authorities. In London, the number of such incidents, at more than 61,000 a year, exceeds the number of fire calls, excluding false alarms. No wonder Mr. Davies of the Chief and Assistant Chief Fire Officers Association said:


Fire service funding would be a farce if it wasn't so serious. The Standard Spending Assessment is worse than the National Lottery—at least there, somebody wins.
Most people would be surprised—I suspect that some hon. Members are surprised—to learn that the fire service receives no funding for turning out to road traffic accidents or rail crashes. There is no funding and no obligation to assist. Nevertheless, the fire brigades turn out, as we expect them to. That part of their work has grown by 82 per cent. since 1983. Is it not time that the Minister recognised that in the funding formula?
I hear that some brigades may be planning to charge victims of road accidents for cutting them out of vehicles. Will they ask to see our credit cards before rescuing us—"Yes, that'll do nicely sir"? I also hear that some brigades are contemplating setting up driving schools as a nice little earner to boost their inadequate budgets.
Recently, we mourned the deaths of three firefighters. On 6 February, the Prime Minister referred to
the selfless bravery of the fire service."—[Official Report, 6 February 1996; Vol. 271, c. 133.]
Why, then, do the Government refuse to fund this selfless service? It is intolerable that it should take the tragic deaths of courageous public servants to draw attention to the dire state to which the fire service is being reduced. As the Fire Brigades Union has said:
how many firefighters and members of the public must continue to die as a result of fires and fire related incidents before the parliamentarians that represent the people of the UK will in fact listen to us. If such views are unpalatable to some, then that is a reality that they must come to terms with, the FBU only relates the experiences and concerns of firefighters.
Must we really, as a nation that has led the world in so many areas of excellence and endeavour, enter the next millennium and the 21st century on the basis that only disaster and significant casualty and fatality figures or losses arising from such occurrences are necessary to even spur the policy makers into considering what might be done to protect us all collectively from such circumstances?
The answer must be no. The Government must think again and we must have this national debate now.

Several hon. Members: rose—

Mr. Deputy Speaker (Mr. Michael Morris): It is obvious that a large number of hon. Members wish to speak. I make a plea for short speeches.

Mr. Richard Tracey: I congratulate the hon. Member for Woolwich (Mr. Austin-Walker) on winning this important debate, which I am pleased to be able to participate in, especially as a London Member. He is a London Member who has spoken before on the subject regarding London, but this morning he has given the House the opportunity to debate the fire services in the rest of the country. I shall concentrate on London.
Congratulating the hon. Gentleman on getting the debate and choosing this subject is about the last compliment that I shall have for him. The hon. Gentleman has given us a tour d'horizon of the fire services and the arguments that many of us have heard before from representatives of the Fire Brigades Union in our constituencies. I wonder, with all his hopes and wishes, whether his speech has been looked over

by the hon. Member for Dunfermline, East (Mr. Brown). There were considerable cost implications in what he said. I imagine that the Under-Secretary of State, my hon. Friend the Member for Leeds, North-East (Mr. Kirkhope), will have something to say about that and that our colleagues in the Treasury will examine closely what Labour Members have said about the fire services. Costs are vital in every area of government and of public service, and the fire service must be subject to rules of efficiency. The hon. Member for Woolwich said that the Audit Commission's assessment of savings of £67 million in the fire service across the country is on the high side—a fact that he claims the Audit Commission now acknowledges. I have not seen any documentation to that effect, but, if about £67 million in efficiency savings can be achieved across the nation, presumably we are talking about possible efficiency savings of £12 million to £15 million in the London fire service. The Audit Commission suggested efficiency savings in a number of areas.
I turn now to the specific arguments regarding the London fire service. I praise the bravery of the fire service and the enormous skills of the front-line firefighters in our capital city. I am sure that everyone agrees that London has a fine fire service, which is well above the minimum standards laid down by the Home Office in terms of fire appliances and fire stations.
Therefore, I was amazed when I heard that the London fire authority was considering closing four fire stations and reducing the number of fire appliances in London. According to figures provided by the fire authority, it has substantial reserves totalling £27 million. Its standard spending assessment has increased this year and the level of the cap has also increased by £5 million.

Ms Hodge: I am glad that the hon. Gentleman has managed to praise the London fire service. Does he agree that, if the fire service in London is funded by eating into reserves, those reserves will vanish by 1998–99? Does he agree also

Mr. Deputy Speaker: Order. Only one point should be raised by way of intervention.

Ms Hodge: The two matters are linked.

Mr. Deputy Speaker: Order. Hon. Members should recognise that it is a tradition of the House that interventions deal with a single subject.

Mr. Tracey: As she also represents a London constituency, the hon. Member for Barking (Ms Hodge) may wish to catch your eye to speak in the debate, Mr. Deputy Speaker.
We are talking about £27 million in reserves for the London fire authority. I understand that the Birmingham fire authority has only £2 million in reserve, so reserves of £27 million are far and away above the level required. The hon. Lady has led a local authority—we all have views about it—and she must recognise that £27 million is an enormous sum. At the beginning of the year, the director of finance for the London fire authority said that the reserves were too high and should be reduced. He revealed also that the fire authority underspent by £3.7 million last year. What possible reason could it have for threatening to close four fire stations and reduce the number of fire appliances—two of them in Twickenham and in Wimbledon close to my constituency? Naturally, I deplore such plans.
A remarkable thing then occurred. Hon. Members and the London local authorities complained about the plans previewed by the London fire authority. Quite mysteriously, about a week before it was to meet to decide on the budget cuts, we heard that a Labour party caucus meeting somewhere in London had decided that the four fire stations would not close and that several fire appliances would not be removed. Councillor Ritchie, the Labour leader of the predominantly Labour-controlled London fire authority, then announced to the nation what had been decided in the Labour party caucus meeting. That is a disgraceful way to run the fire service in the capital.
We have heard much about the level of protection needed for the millennium celebrations in Greenwich and the protection necessary for the great stores, Government buildings and our built heritage in central London. Fire safety has been undermined by the disgraceful actions of the fire authority which, after scaremongering and politicking, reached a decision in a Labour party caucus meeting and announced its decision via a press release.

Mr. Nirj Joseph Deva: Is my hon. Friend aware that 22 Labour councillors, six Conservatives and one independent serve on the London fire and civil defence authority? In addition to the funding that the authority has put aside and its underspend, the Audit Commission conducted an inquiry and found that the authority's training methods and its expenditure were above the level requested by the commission. As a consequence, is my hon. Friend aware—

Mr. Deputy Speaker: Order. I have made it clear that interventions should comprise a short question and not a speech.

Mr. Tracey: I am well aware of the situation that my hon. Friend the Member for Brentford and Isleworth (Mr. Deva) describes. He has been at the forefront of the campaign against the disgraceful cuts which would have reduced the number of appliances in his area.
I shall draw my remarks to a close as I have highlighted my anger upon hearing about the nonsensical actions of the predominantly Labour-controlled fire authority. Its behaviour has mirrored that of Labour local authorities around the country. There is no basis for the authority's assertions. My hon. Friend the Member for Croydon, North-East (Mr. Congdon) has tried for three weeks to get details from the fire authority about why it suddenly reversed its decision to close four fire stations and reduce the number of fire appliances. Perhaps he will catch your eye, Mr. Deputy Speaker, and explain the situation.
I believe that the London fire authority has engaged in a particularly squalid exercise. The final straw was Councillor Ritchie' s announcement that the London fire authority intends to increase overseas travel allowances—heaven knows why—by £5,800 and to increase members' expenses by £43,200. That shows what the London fire authority is made of.

Mrs. Gwyneth Dunwoody: Shortly after I became a Member of Parliament, I was holidaying in the former Yugoslavia when a charter plane crashed. Many British people died in the accident and those who survived suffered appalling burns. I spent four

days with my doctor husband in the hospitals that were treating the victims, and the sights, sounds and smells of what fire can do to human beings will remain with me for the rest of my life.
Therefore, when I learnt that the Cheshire chief fire officer was saying, in an extremely responsible way, that the fire service was now at a considerable risk of not being able to provide adequate and proper fire cover, I took it seriously. I took this issue seriously—not like some hon. Members who seem to think that it is a suitable subject for squalid party political arguments—because there are men and women in the fire service who daily risk their lives and considerable injury. They have a strong belief that our constituents are entitled to high-quality fire services and protection.
It is important to take seriously what the Cheshire chief fire officer is saying. He has looked at the cuts—not one set of cuts but a series of cuts across the budgets over a number of years—and has concluded on behalf of the Cheshire fire service, and many fire services across the country, that one can no longer seriously talk about providing the level of cover that is essential. He has not said that the fire services cannot respond to an external audit that says that there should be some efficiency savings and a rearrangement in the way in which they work.
The chief fire officer has said something more fundamental: that we have now undergone a series of changes, we are still undergoing a series of changes and we are no longer able to provide the level of care that the general public are entitled to assume we will provide. That is the issue—it is an argument about not the political views of individual fire committees, but whether the House of Commons will face up to the fact that we are not allowing sufficient money for the fire service to do the job for which it is retained. That seems to me to be so essential and simple, and I cannot see why it is difficult for hon. Members to understand it.
The Cheshire chief fire officer said—I am talking about Cheshire, but what I am saying applies to many brigades:
Our study indicates that the Brigade is very efficient. The Brigade has been required to make significant savings in each of the last three years, in 1994/95 these amounted to £195,000".
He continued:
One of the best indicators of the overall cost effectiveness of a brigade is its gross cost per pump. Other statistics may provide an indication of the efficiency … but the gross cost per pump, when compared to benchmark figures, gives an indication of the likely savings".
He then details the figures, which prove time and time again that the fire service is doing a good job. The Cheshire chief fire officer has also given me the effects of the underfunding over these years, including capital costs. It has meant a cut in operational officer cover, a reduction in managerial posts, changes to staffing practices at shift changeover and bank holidays, a reduction in rescue tender provision, a rationalisation of special appliance provision—I could go on. In capital costs, it means that equipment is not being replaced, that modern equipment that is available to save lives is not being supplied and that there are real problems in finding the money for core training for officers.
I shall briefly say what I think of a Government who allow an important service like the Fire Service college to be treated in that shabby way. The Government have seen


fit to write off the debts of innumerable companies when they want to sell them on the private market. The Government have no difficulty whatsoever in writing off billions of pounds of taxpayers' money, but when the fire college was set up as an independent agency, it was lumbered with considerable debts and was told to recover them from the fees that it charges.
The result is terribly simple and plain: throughout the United Kingdom, fire services are not sending the same number of fire officers for core training, which their chief fire officers believe to be essential, because of the cost. Such training is down by 25 per cent. Fire officers in need of proper training are not receiving it, not because no one accepts the need for it but because they cannot pay for it. That is a simple formula. What will it lead to? It will lead to death, to injury and to lifetimes of unhappiness for our constituents who are caught in major fires. It is unacceptable for a so-called civilised country to have got its priorities so badly wrong.
I have listened with care to the various debates as to whether the money is available. Is it not astonishing that when the Government want to spend a great deal of money on arms, they can find however much money they want? However, when we want to find money to provide a high-quality fire service—to protect our constituents, to carry out the training programmes that fire services are increasingly doing and to teach small children what to do if a fire breaks out—it is not available. That is despicable and unacceptable.
If this debate awakens in the Under-Secretary of State for the Home Department, the hon. Member for Leeds, North-East (Mr. Kirkhope), even a tiny voice of conscience, it will have achieved more than what my hon. Friend the Member for Woolwich (Mr. Austin-Walker), who introduced the debate, set out to achieve.

Mr. Geoffrey Clifton-Brown: I am delighted to have the opportunity to take part in the debate. I congratulate the hon. Member for Woolwich (Mr. Austin-Walker) on securing the debate and I am pleased to follow the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). She has given me an ideal introduction to the debate, because I want to say a few brief words about the Fire Service college at Moreton-in-Marsh, which is in the heart of my constituency. The college employs 250 of my constituents in a rural area. It is a national asset.
I shall briefly describe the college to hon. Members. It comprises 500 acres of an old airfield. It has magnificent facilities: a mock motorway, so that it can stage mock pile-ups; an office block, so that it can stage fires in a three-storey office block; and an entire mock ship, so that it can stage fires on it. The college teaches British firemen with the best facilities and training in the world. The college has excellent information technology laboratories and it has the national fire service chapel. It is an absolute gem—it is a national asset. We should be able to train British firemen to the highest standards at the college, and market its services to the rest of the world because there is nothing else like it, except in the United States.
I have had discussions with Baroness Blatch about the future of the college. It was set up as an independent trading fund in 1992 and it has consistently been making

a loss. In case any hon. Member jumps to the conclusion that it is being run inefficiently, I emphasise that that could not be further from the truth. The college was set up as an independent trading fund on 1 April 1992, and it was the first such independent trading fund to be set up by the Government. Unfortunately, the Treasury had eyes on a milch cow that was non-existent and it set it up with several severe disadvantages, which I shall outline to hon. Members.
When the Treasury set up the Fire Service college, it made it honour its commitment to prices of courses before it was set up as a trading fund. That reduced the college's profit in its first year of trading by £1.2 million. Much more importantly, a valuation of the college was carried out by a well-known firm of chartered surveyors at £33 million. Being a chartered surveyor, I hesitate to criticise a fellow firm of surveyors. However, I am reliably informed that that was a gross overestimate of the valuation of the college at that time and that it should have been less than £10 million. The problem is that, because of that trading fund status, the college is obliged to pay notional interest on half the loan because half of it is deemed public interest capital, and the notional loan in the accounts this year amounts to £1.7 million.
The college is thirdly disadvantaged by a further £1.25 million as a result of a decision last year by Her Majesty's Customs and Excise that the college has to pay VAT but cannot reclaim it. The notional interest, and the fact that it cannot reclaim VAT, amounts to about £2.5 million. Last year, it made a loss of £2.75 million. The chief executive, Nigel Finlayson, and the commandant, Mr. David, do an excellent job, but it is tremendously dispiriting to be saddled with such on-costs about which nothing can be done.
I have had discussions with Baroness Blatch to see what can be done to secure the college's future. I have been trying to encourage other Government organisations to place their training at the college, most notably the Ministry of Defence. However, I have received a reply from the MOD saying that it is not prepared to commit its training requirements to the national Fire Service college while there is a question mark over its future.
The chief executive goes all over the world. I pay tremendous tribute to him because he increased the non-UK training budget last year by more than 10 per cent. He is doing a magnificent job, but he has one hand tied behind his back when the accounts for the past three years show that the college has been making a loss of more than £2 million.
I do not want to take up too much of the debate, but I suggest three courses of action to the noble Baroness in order to secure the college's future. First, as has already been mentioned by the hon. Member for Crewe and Nantwich, the Government should, having set up the college as a trading fund on the wrong basis, now write off all past debts and notional interest rates, allowing it to start with a clean sheet so that we can see whether it is run efficiently.
If the Government are not prepared to do that, they should consider—I hope that my hon. Friend the Minister will take these concerns back to Baroness Blatchallowing the college to revert to the former Home Office vote. The college should be run directly from the Home Office and everybody should accept that the college will make a loss of about £2.5 million a year.
If neither of those two alternatives is acceptable, the college should be sold off to an entrepreneur, with appropriate safeguards for training the UK fire service, with a remit to go out into the world and obtain as much non-UK fire service business as possible. It should then be required to make a profit. The Government would benefit from the sale of the college and the people running it would not have the burdens around their necks.
As has already been mentioned this morning, there is considerable concern about the adequacy of the training of UK firemen. At the moment, the college provides just over 16,000 man days of fire training. But there is great concern that, with the squeeze on the SSAs of each fire authority, that figure may drop to 14,000. If that happens, the college will make a substantially bigger loss next year, and that will not be caused by the college's inefficiency in organising itself.
It would be a tragedy if this national asset were to be let go. I urge my hon. Friend the Minister to take those concerns back to Baroness Blatch. I have written her a detailed letter, to which I have yet to receive a reply. However, I reassure the Government that I shall continue to battle for the future of the college because it is a national asset.

Mr. Chris Davies: I do not agree with everything that the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) said; none the less, his speech was like a breath of fresh air coming through the smoke compared with some earlier contributions. I feared that the debate would deteriorate into a Conservative and Labour battleground over the particular problems in London. I hope that that will not happen, because the problems affecting the fire service concern hon. Members on both sides of the House and are of great concern to our constituents.
We know from the remarks addressed to us all by Mr. Davies, the president of the Chief and Assistant Chief Fire Officers Association, of his concern that, across the country, the fire service is, in effect, facing death by a thousand cuts—the gradual erosion of standards which is taking place year by year, yet is going largely unnoticed in the communities in the areas served by local fire brigades.
As has been said before, in Greater Manchester cuts of £1 million a year have been the fate of the local fire service during the past couple of years. Towards the end of last summer, I had the opportunity to visit firefighters in Oldham and Littleborough, serving my constituency, and to learn at first hand just how our firefighters spend their time. They had just finished a period which had seen some of the most intensive use of fire tenders and fire crews for many years, with a spate of moorland and heath fires in other parts of the country which had stretched their resources to the limit and beyond. Retired firefighters had to be called in to eke out the resources at that time.
General concern was expressed at both those fire stations that the squeeze on finance was likely to reduce the number of tenders available in their stations if a major incident took place across a wide area. There was also concern that access to the most modern equipment being developed by the fire brigade would be denied to them and they would have to make do with equipment which, while good in its day, would not meet the most modern requirements, placing the lives of firefighters at risk.
It is obvious that the vast majority of a firefighter's time is not spent fighting fires. It is spent in training, in maintaining equipment and in dealing with false alarms. Some 40 per cent. of incidents are cited as false alarms and, in practice, I suspect that that number is growing rapidly. The introduction of smoke alarms has been a major asset in saving lives in the home, but they have led to many additional call-outs for fire crews.
The fact that firefighting crews are not fighting fires does not mean that their time is not being spent usefully or that it is being wasted. They have to be equipped to deal with emergencies as and when they occur. They do not occur neatly, as a Government accountant might require them so to do.
When the bell rings in a fire station, the officer taking the call cannot know whether it will be a false alarm or will lead to tenders being sent out to deal with a life-threatening major fire or a major incident on a motorway in which a driver has to be cut out of the wreckage of a crashed vehicle. He cannot know whether it will prove to be a major city centre incident, perhaps the result of a terrorist outrage, something to which we have been alerted recently, requiring fire crews from across the county to meet the needs that arise. The service must be equipped to deal with those worst case scenarios.
Sadly, I fear that that is not the approach being taken by the Government. They seem to require brigade officers to use their equipment and resources as efficiently and effectively as possible. That, of course, is right, but the mechanism that they are using is the crude one of spending cuts requiring officers to face up to a crisis and to adjust to it accordingly.
The basic assumption for planning purposes is not the need to meet the worst case scenarios, but the need to deal with the average demands being placed on the service. That approach, which might be admirable if applied to an efficient quality manufacturing industry, is not appropriate to a fire service which has to meet the needs of people in situations which cannot be predicted. When the call comes, our firefighters need to be equipped and ready. The Government must address their concerns and ensure that they have the resources to meet the requirements placed on them and to maintain the confidence that the public rightly feel in the fire service.
I apologise to the House for the fact that I will not be able to stay to hear the end of the debate. I shall finish my remarks and allow other hon. Members to speak, but I wish to remind the House of the remarks made by Mr. Davies in the letter that was circulated to all hon. Members. He said that "delay is not acceptable" because it is "dangerous to firefighters". The House should accept that the cuts in expenditure are threatening a quality public service of which we can be proud, and they must be halted.

Mr. James Hill: I wish to take only two minutes of the time of the House. Although the debate has given a general impression of the fire service, it has centred almost entirely on the London scene and I was quite surprised to learn that there was a deposit account for the London fire service of £27 million. That may have made the authority change its mind when it considered closing down four stations, but in Hampshire it is a totally different story.
The fire service in Hampshire is very efficient and modern in its approach. All the observations that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) made about the training college in his area are duplicated in Hampshire.
There can be no doubt that cost is the issue. People in all grades of society are worried about cost and maximum efficiency. The way to get the message over is to ask the fire service to do the tasks and, if it cannot, exceptions can be made. The plan of Baroness Blatch and her colleague is to meet groups of Members of Parliament. All the Hampshire Members of Parliament have been given the opportunity to meet Baroness Blatch, and instead of all the argy-bargy and semi-political chitchat that some hon. Members have raised in the debate, we can have a balanced debate about the pros and cons. I am sure that, after meeting the Ministers, the Hampshire Members will put forward a formula that could carry the day.
Thank you for calling me, Mr. Deputy Speaker. I am sure that the debate has been extremely useful in highlighting another problem in modern society.

Mr. Lawrence Cunliffe: I shall speak as rapidly as possible because I wish to deal exclusively with the Greater Manchester fire service, its resources and its role.
In 1986, the Audit Commission reported that the fire services generally were "notably well managed", great value for money and, in efficiency and effectiveness, were second to none in the United Kingdom and the world. That is a glowing tribute to our fire services. The problem is the inability of the fire services to fulfil the statutory functions that are placed on them, because of the cuts imposed on them and their ever-increasing work load. The work load is rising at the same time as a static amount of money is available to the fire services to cope with the explosion in the number of incidents.
The incidence of fires in Manchester has constantly increased at a rate that is not commensurate with the amount of money available to increase the facilities to cope. In 1985, 48,000 incidents were recorded in Manchester, and in the past decade there has been a 70 per cent. increase, to 81,000 in 1995. Operational resources remained virtually unchanged in the same period. In 1994, the fire service in Manchester had just 68 appliances available to deal with that work load, and every single fire tender available had to deal with between 3,500 and 4,000 incidents.
When the fire service is forced—I use the word "forced" advisedly—by economic and financial constraints to impose a series of measures that impede or weaken the efficiency of the force, it gives rise to concerns that we all share, nationally and regionally. In my area, there has been much alarm about that problem. Budget reductions over the past two years have been about £1 million. This year—as was announced only yesterday—the chief fire officer of the Greater Manchester brigade said that there would be a £1.9 million deficit. That sum can be taken out of available balances, but the Audit Commission made it clear that it believed that no further injection of funds from the balances could be reconciled. That means that no more reserves will be available until 1998.
We have seen reductions in recruitment. Recruitment courses have had to be revised because of the cuts. The reduction in the use of the Fire Service college has been mentioned today, and I congratulate the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) on the way in which he put the case for the college. I disagree with him on privatisation, but the college is first class and that is recognised by all the brigades throughout the United Kingdom.
We have seen a decrease in repairs and in the efficiency of vital fire appliances. Further funding deficiencies, for obvious reasons, will accelerate the problem and make it harder for the fire services to fulfil their role. The prime example is the use of the fire college and the impact on core and non-core training of brigades. Future training is necessary—indeed, imperative—to give a first-class service.
In spite of the reduction in funding, the fire services are now expected to finance more and more high-tech equipment, which is more sophisticated and more costly than previous equipment. The new equipment must be used to its maximum efficiency to get value for money for the fire services, which do such a necessary job.
There is also increasing pressure to devote more resources to fire safety education. We need to do more work in fire prevention and to educate the general public. I tabled an early-day motion recently, which was signed by some 60 Members of Parliament, about the tragic death of a 15-year-old girl, Melanie Ellison, who suffered horrendous burns when the modern padded shirt that she was wearing—like the shirts and anoraks worn by many young people and, indeed, adults—ignited through a single spark from a cooker.
Some hon. Members will remember the campaign on foam in furniture. Such shirts should be labelled to show whether they are non-flammable or inflammable, according to the type of material used to fill them. Such tragedies could be avoided if warning labels were used. I have pointed that out to the Home Office, to the Minister for Competition and Consumer Affairs and to the industry. They have a clear responsibility to ensure that imported goods, many from third-world countries, should be subject to safety standards when imports are licensed. Labelling for such garments is imperative.
Last year, we had an unusual summer followed by a harsh winter, and the demands on fire brigades have been heavy. In the first three weeks of August, many specialist uniformed staff manned vans and cars to deal with the grass fires, and off-duty personnel were recalled for duty. Some departments have not yet recovered from the backlog of administration work that was caused. For such unusual circumstances, compensation ought to be paid.
Bonfire night and the end of December, when there was severe weather, saw more increases in activity. On 30 and 31 December brigade control handled 763 and 728 calls respectively—twice as many as the norm. A great deal of additional overtime and wear and tear to vehicles was incurred in 1995 owing to the additional number of incidents, but no additional funding has been provided to help the service cope with these unpredictable circumstances.
I do not want to make a political point directly, but in the long term if we are penny wise and pound foolish there will be a regrettable loss of life and limb. That will have certain political consequences for the Government at the next general election.

Mr. George Howarth: I congratulate my hon. Friend the Member for Woolwich (Mr. Austin-Walker) on winning the ballot, and on raising this important subject. I also congratulate him on his thoughtful and effective speech.
My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), in her customary way, made some sound, commonsense points not just about Cheshire but about the fire service's wider problems. My hon. Friend the Member for Leigh (Mr. Cunliffe) has just given us a detailed account of the difficulties confronting the Greater Manchester fire authority. I know that he takes a great interest in that topic.
I begin with two statements which I suspect will attract consensus. The first is that firefighting is a dangerous occupation. The recent deaths of a couple of firefighters have served only to underline that point. Every hon. Member will want to be associated with sending to the families of those who lost their lives our deep appreciation of the risks they took and the price they paid on behalf of the general public.

Mr. Llew Smith: My hon. Friend may be aware that two part-time firefighters in my constituency died a few weeks ago attempting to save the life of a child. Their deaths were mourned, and their courage was saluted by all. But the local community is very angry, because the common-law wife of one of them, who was in a caring and loving relationship with him for 17 years and who has a child of 10, has been informed that she will not receive a pension, because she is not married.
I contacted Baroness B latch to express my concern and anger. She responded by saying that, although the matter was under review, even if the outcome of the review was positive, it would not be retrospective. May I have a commitment that a future Labour Government will not just review the situation but will ensure that this woman receives the pension she deserves, so that justice is done?

Mr. Howarth: My hon. Friend and I have discussed that. I should first want the review to reach its proper conclusions, and then to examine them. Generally speaking, we now recognise all sorts of relationships. Divorce law, in the context of pensions, recognises differing relationships outside marriage, and I am almost certain that the review will reach a similar conclusion.
As for my hon. Friend's specific constituency case, I know that there is a great deal of anger in his community. The public admire this country's firefighters, and it would be a nice gesture if the Minister promised to raise the matter with Baroness Blatch and gave a commitment that any regulations that may apply would be waived and the pension granted in this case. That would not necessarily be a precedent—each case is different—and I hope that the Minister will be sympathetic.
My second general point centres on the fact that the fire services offer an emergency service. People in difficulties call out the fire service, and rightly expect help to arrive almost immediately. That may not always be possible, but people certainly expect a fire crew and an engine or two to be in attendance within a short time. Our charge against the Government is that they have refused to face up to the growing crisis in the fire services.
Some of the evidence has already been covered. For 1995–96, the standard spending assessment shortfall arrived at by the Association of Metropolitan Authorities and the Association of County Councils amounted to £52 million, and the shortfall for 1996–97 is forecast to be at least £70 million. Removing so much money from a relatively inexpensive national emergency service is bound to create problems.
I believe that every hon. Member has received a copy of the letter sent by the president of the Chief and Assistant Chief Fire Officers Association, Mr. Davies, who states:

What has happened so far is that a series of issues like capital financing, pensions, fire service training costs, national employee conditions and standards of fire cover have all been examined in isolation, only to find that they are one and the same problem—the need for adequate basic funding to meet objectively set quality standards—and that is a nettle not many people want to grasp".

Mr. Edward O'Hara: My hon. Friend, as a Merseyside colleague, may be aware that Merseyside fire and civil defence authority, on the advice of the chief fire officer, has just set a budget of £52.7 million, which is £2.139 million above the cap. Her Majesty's chief inspector has agreed with the chief fire officer's assessment of these needs of the service.

Mr. Howarth: Merseyside is dear to both our hearts, and my hon. Friend has put his finger on the problem. Statutory obligations and expectations are not matched by resources—that is true across the country.
The Government simply have no way left to explain their case. The only argument they have been able to produce so far is based on selective quotations from the Audit Commission's report last year, entitled "In the Line of Fire". On that, they base their idea that there is scope for saving £29 million. A more realistic figure, quoted by my hon. Friend the Member for Woolwich, would be £7 million, which, in a global service of this type, does not add up to much in the way of efficiency savings.
Fire authorities in Tyne and Wear, Cheshire, Manchester and Merseyside—and many other places—are having to make reductions that will have a measurable impact on services. It will mean that fire engines will be mothballed, stations will be closed and there will be job losses among firefighters.
Similarly, capital expenditure was reduced last year by 50 per cent., and it is forecast, from what we know about basic credit approvals, to do so again by an average of 35 per cent. The Government say that the private finance initiative can bridge the gap, but they have not yet been able to point to a single case in which the PFI could be made to work in the fire services.
The Audit Commission report "In the Line of Fire" shows that there are many in-built problems with the SSA formula: pensions, as my hon. Friends have mentioned, the assessment of risk, the application of minimum standards and special services, which are not covered by the formula. None of that is covered. What we have is a working party here, an inquiry there, a special investigation elsewhere. Government by working party does not add up to proper management of our fire services.
I ask the Government to look further at transitional costs, particularly those in Wales and the shire counties, because they are a serious problem. We have government by


working party, a Government who have failed and refused to face up to the in-built problems in the fire service. I suspect that it will take a change of Government before anybody with responsibility faces those problems. The sooner we have a Labour Government prepared to accept these responsibilities, the sooner we can start moving again.

The Parliamentary Under-Secretary of State for the Home Department (Mr. Timothy Kirkhope): The recent tragic events in Gwent and Avon have reminded us yet again of the risks that firefighters take every day of their working lives. I share hon. Members' feelings about that, and pay sincere tribute to the dedication and selfless courage of all those who work in the fire service.

Mr. Llew Smith: Will the Minister give way?

Mr. Kirkhope: No, I have only about eight minutes.
The service performs an essential public duty; whether it is operating as an emergency service or responding to a more routine call for assistance, it is rarely, if ever, found wanting. We are all profoundly grateful for that.
The fire service has been a local authority service since the second world war. Local "fire authorities" have a statutory responsibility to provide an effective and efficient fire service. As a result, funding for the fire service is included in the local government finance settlement, which my right hon. Friend the Secretary of State for the Environment announced in January. It is, I believe, a fair settlement.
In 1996–97, central Government support for local authorities will increase by £966 million. Total standard spending in England for 1996–97 has provisionally been set at £44.9 billion. That is an increase of 3.3 per cent. on 1995–96. The fire service standard spending assessment for England in 1996–97 has been increased by £17 million. But it is ultimately for local authorities to decide how much is spent on individual services, in the light of their local circumstances.
It is true that the fire service is being asked to make efficiency savings, but so is virtually every other public service. It is essential that we ensure that the taxpayer gets the best value for money, as was said by my hon. Friend the Member for Surbiton (Mr. Tracey), who has explained to me the reasons why he has had to leave us.
When the Audit Commission looked at the fire service, in its report published last year, it concluded:
There are local opportunities that can be taken now within the current framework. The locally achievable savings identified by this study are £67 million a year. This represents 5 per cent. of the total expenditure on the fire service".
Although some people—some hon. Members, even—may take issue with the Audit Commission's conclusions, I stress that it is totally independent and has an excellent track record in this area. Moreover, its report highlights specific areas in which efficiency savings can be made. It suggests that
reducing sickness rates in all brigades to the level of the lower quartile would save £17 million a year nationally.
Bringing the level of leave in all brigades down to the level of the lower quartile would lead to savings of £8 million a year; and moving all brigades' management costs to the performance of the most efficient quarter would save about £29 million a year nationally.
The fire service element of the SSA is distributed to individual authorities via a formula that is reviewed every year in consultation with local authority associations. The Government carefully considered the formula for the fire service element of SSAs for 1996–97. We decided that it should be adjusted to include factors for fire safety enforcement, fire safety education and firefighters' pensions. That is in line with recommendations by the Audit Commission.
The process of reviewing the SSA formula for the fire service for 1997–98 has just begun. To help inform the review, the Department of the Environment has commissioned research on the costs of providing services in densely and sparsely populated areas and the area cost adjustment. That adjustment is included in the formula to compensate for the additional cost of providing services in south-east England.
The Home Office is also participating with local authority associations in a technical group, which is exploring the possibility of an alternative formula based on the number of fire stations in each brigade area. Any change to the formula must not unreasonably increase the grant to some brigades and disproportionately reduce it to others. However, the Government are always willing to see what improvements can be made.
The provisional council tax capping criteria for 1996–97 set by the Secretary of State for the Environment allow an increase in net budget of 2 per cent. for metropolitan fire authorities and 3 per cent. for shire authorities as the norm. However, in many cases, authorities were permitted an increase above that norm if the result otherwise would have been to prevent them from receiving the full benefit of agreed increases in SSA.
If an authority believed that it could not set a budget for 1996–97 that would allow it to meet its legal obligations, it had the option to set a budget higher than the proposed capping limit, and to apply to my right hon. Friend the Secretary of State for the Environment for redetermination of the cap. Some authorities have taken that option. The outcome of such applications will depend on the quality of the case that is made.
Many hon. Members referred to London, the SSA of which will increase by £1.1 million in 1996–97. Under the proposed capping criteria, the authority was able to set a budget of up to £5.1 million—or 2 per cent.—more than in 1995–96. In setting its budget, the authority would have taken these factors into account, as well as the scope for savings and the availability of its reserves.

Mr. David Congdon: As £27 million of reserves have emerged only belatedly after the consultation period by the LFCDA, will my hon. Friend urge our right hon. Friend seriously to consider rejecting these unnecessary proposals from the London fire brigade?

Mr. Kirkhope: My hon. Friend is right to raise that, as was my hon. Friend the Member for Surbiton. The relatively high reserves of about £27 million were referred to even by the authority's own director of finance as needing to be reduced. It is important that the Labour party should remember that so much political activity, which has been referred to by my hon. Friends, is not particularly in the interests of the fire service for London. Indeed, I am aware that my hon. Friend the Member for


Brentford and Isleworth (Mr. Deva) has asked that an investigation take place into the activities of the authority in that regard.

Mr. George Howarth: rose—

Mr. Kirkhope: I shall not give way.
As hon. Members will know, the authority has decided to set its budget for 1996–97 at the capping limit. It has decided not to proceed with the closure of four fire stations, recommended by its own fire cover review. Nor does it propose to seek approval to withdraw appliances from seven stations, which was also recommended. It has, of course, applied to my right hon. and learned Friend the Home Secretary for approval to withdraw pumping appliances from 15 fire stations. The authority also intends, as I understand it, to provide an additional appliance at two fire stations. As hon. Members will know, that does not require approval, and was mentioned by Opposition Members.
Under section 19 of the Fire Services Act 1947, my right hon. and learned Friend's approval is required if a fire authority wishes to reduce the number of its fire stations, fire appliances and firefighting posts. My right hon. and learned Friend has a specific but limited role in considering applications, and grants approval when the conditions are met.

Mr. Llew Smith: Will the Minister give way?

Mr. Kirkhope: No.
My right hon. and learned Friend will also consider representations in addition to those already forwarded to the fire authority, provided that the individual or organisation concerned forwards them promptly on being advised that a section 19 application is to be submitted.
The standards that are applied dictate the initial response to a fire in weight and speed of attack. They rest on four main standards of service, according to the risk category into which an area has been placed. This system of risk is based on the characteristics of the buildings and property in an area, and assumes for each category that a predetermined number of firefighting appliances should attend within a certain time.
The standards are not just nationally recommended, but are nationally agreed in the Central Fire Brigades Advisory Council.
The Government consider that the standards have served the country well, but that is not to say that we regard them as immutable. The Audit Commission's report recommended another fundamental review of the levels of fire cover, and we are proceeding with that review.
We are grateful for the assistance of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) in our consideration of the future of the Fire Service college. We are keen for it to remain in existence. Although it is subject to financial constraints, we want it to succeed, and will do all we can to preserve it.
The fire service in England provides an excellent public service. We value the work of firefighters—

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. Time's up.

Taiwan

Mr. William Powell: This debate takes place at a particularly opportune time, in view of the unfolding drama involving mainland China—the People's Republic of China—and Taiwan. I speak as chairman of the British-Taiwan parliamentary group; my interests are fully declared in the Register of Members' Interests, but let me add for the avoidance of doubt that I have visited Taiwan twice as a guest of the Government of the Republic of China on Taiwan.
There is no doubt that relations between Great Britain and Taiwan have improved enormously in the past few years, and that that has resulted from a great deal of hard work on both sides. I pay tribute to members of the British Government who have been involved, and to our representatives in Taipei who have worked so hard to build up trade and cultural relations with the Republic of China. The House and the country owe a great debt to those involved in such work—for instance, Mr. Mon-ice and his successor, who has recently gone to Taipei.
I also pay tribute to the work done by representatives of the Republic of China in London, particularly Dr. Eugene Chien and his admirable staff, who have worked hard in recent years to make relations between our two countries increasingly warm. And I pay tribute to the remarkable and redoubtable Dr. David Liu, head of the cultural office in this country, whose distinguished work in building close educational and cultural ties was recently and appropriately recognised by the University of Central England in Birmingham. The university awarded Dr. Liu an honorary doctorate, a thoroughly well-earned tribute and distinction.
The objective indices of the improvement that is taking place can be found everywhere, but let me highlight two or three that really matter. There is no doubt that trading and commercial ties are becoming much closer. That is a two-way process: although the balance of trade is not to Great Britain's advantage, ICI, Glaxo-Wellcome and many other British enterprises are investing in Taiwan, and the Taiwanese are beginning to invest in the United Kingdom. Most recently, a huge investment in Scotland was announced. I particularly welcome that, because many of my constituents have relatives who live in the part of Scotland where the enterprise is to be based. I hope that their families will secure employment in the Motherwell area.
That is by no means the only investment, however. There are successful Taiwanese enterprises on Tyneside, in the west midlands and elsewhere, and the Taiwanese have invested in the City of London. I hope that there will be further inward investment. I pay special tribute to all who are working so hard in this country, and with the British Government, to secure those investments.
There has been a huge increase in the number of Taiwanese tourists coming to this country. Until a few years ago, it was very difficult for people from Taiwan to travel to Great Britain. Although niggling difficulties remain, much hard work has been done to try to reduce them, and I pay tribute to all those involved. We have much to gain from the Taiwanese students who come here. The staggering increase in their number is the most dramatic development of all. When I first became interested in the subject, only a handful visited this country each year—certainly fewer than 100. Now, the number is rising 10,000.
It is understandable that the Taiwan authorities should want only the best for students who go abroad to enter further and higher education. It is therefore not surprising that they wish to send so many to our universities and colleges. Although some of those in higher education are pessimistic about their financial opportunities, the fact remains that our further and higher education institutions are the best in the world, and are recognised as such. It is not surprising that so many students want to go to Cambridge, Imperial college, the London school of economics, Oxford and scores of other institutions, and I hope that they will arrive in ever larger numbers.

Mr. Hugh Dykes: The figure that my hon. Friend has quoted is truly remarkable, given that the figure for the People's Republic of China is only about 8,000. That is a major achievement.
We should bear in mind the current tensions between the two countries, and the fact that the Chinese authorities in Beijing have repeatedly suggested the concept of one country, two systems for Taiwan along with their plans for Hong Kong. Notwithstanding the current dangerous circumstances—one wishes that both sides would cool it—and bearing in mind the fact that Taiwan is historically a province of the Chinese motherland, does my hon. Friend agree that it would be a great mistake for the American authorities to encourage the Taiwanese population, or politicians, to think of future independence?

Mr. Powell: I thank my hon. Friend for his observations. He chairs the British-Chinese parliamentary group, and has extensive experience of relations between Great Britain and China. I know that his words—along with mine and those of my right hon. Friend the Minister—will be minutely scrutinised by people in Beijing, Hong Kong and Taiwan, and throughout the Asian Pacific region. The debate is taking place at a time of extraordinary sensitivity in the development of Chinese relations and policy towards all China—in which I include Hong Kong, the People's Republic, Taiwan, Macau and the whole Chinese world. My hon. Friend is right to sound a note of caution, and I hope that it will be heard and acted on by the authorities in Beijing.
Tension is clearly rising rapidly, and the danger of a miscalculation could be considerable. It is important that every effort should be made in the international community to lower the temperature and reduce the danger of any such miscalculation. Taiwan's greatest triumph has been its moves towards establishing a genuine popular democracy. It is extremely difficult to do that—not merely to hold an election and to ensure that it is the only election that is ever held, but to establish genuine and legitimate democratic institutions and ensure that freedom can be fully exercised in all areas of life, not just in the election of a national leader.
The election of a President, which will take place next week, is only the latest step in a process that has been going on for nearly 10 years—since 1987—to establish fully democratic institutions. We should be proud of any country—any region. indeed—that takes such steps. The greatest tribute that I pay those who lead Taiwan is to the courage, persistence and steadfastness that they have

shown in unfolding their programme of democratic reform. Only 10 years ago, the stage of democracy that is being reached would have been unthinkable for people who knew Taiwan. Not least for that reason, we should do all we can. I know that my right hon. Friend the Minister and my right hon. and learned Friend the Foreign Secretary are working hard to ensure that the danger of enhanced tension is reduced as much as possible. The People's Republic has announced that the military exercises in the strait of Taiwan are to last nine days. Clearly, prolonging them would be a dangerous step.
Equally, if the People's Republic enhanced the degree of the exercise and, instead of conducting what it calls air exercises over the sea, tested live missiles, leading to aggression against the islands of Quemoy or Matsu, or against the main island of Taiwan, that would lead to a most regrettable and difficult international position. As someone who has tried to study these matters intensely in recent years, I look forward to a time when Taiwan and mainland China can be reunited, but that should not be achieved by coercion or by trying to undermine the remarkable progress of liberalisation and democratisation that has taken place on Taiwan.
Nevertheless, I hope that it will be possible for all Chinese people to come together in one country, even if it involves more than one system of government at some stage. That policy is being pursued by the Government of Taiwan and by President Lee, who has been responsible for that remarkable programme of liberalisation and democratisation. I therefore support reunification, but not reunification by means of coercion, which is not the way to conduct international relations at this stage in the world's history. As the people of Taiwan rank, by reason of their history, as the most sophisticated in the world, to imagine that the rest of the world community will accept an attempt to achieve by coercion an objective that is shared on both sides of the strait of Taiwan, will cause considerable problems in the rest of the world.
Taiwan's revolution has been peaceful and economic. It has led to enormous prosperity and to huge investment by Taiwan in southern China. Let no one for a moment imagine that what has taken place in southern China to the north of Hong Kong would have been possible without Taiwanese capital, which continues to pour into southern China and to build the Chinese economy. Of course, there is a natural partnership between these people and the wish to bridge their political gulfs is a legitimate aspiration.
In recent years, many hon. Members from both sides of the House have had the opportunity to visit Taiwan. I hope that more will go to see for themselves the remarkable developments at Hsinchu science park, the original one-stop shop for the world, now covering 140 acres. Taiwan's gross national product is bigger than that of Scotland, Wales and the whole of Ireland put together.

Mr. Derek Fatchett: I congratulate the hon. Gentleman on raising this issue and on the way in which he has sensitively dealt with the topics—the way in which he has talked about the immediate issues and the future will unite the House. His comments about the advance of democracy in Taiwan will also be supported by hon. Members on both sides of the House. It is a great shame that we do not have more time to debate this issue, but I congratulate him on raising it.

Mr. Powell: I am grateful to the hon. Gentleman. It is important that we speak in the House with one voice on


this matter because there must not be any miscalculation of where we stand in these sensitive days. Equally, the future matters. Taiwan, already the 12th largest economy in the world, will play a substantial part in that future. It is an economic powerhouse.
I know that my right hon. Friend the Minister is doing all that he can to improve relations between Great Britain and Taiwan on a number of fronts. My final point may not be my most popular point with him. As Taiwan is the source of the second largest reserve of savings in the world, it is absurd that some international institutions—I have in mind especially the World Trade Organisation, which supersedes the general agreement on tariffs and trade, the International Monetary Fund and the World bank—should not have Taiwan as a participating member.
Some mechanism will have to be found, which may initially amount to less than political recognition of Taiwan, but which will enable it to participate in the world community to a much greater extent than has been possible. I hope that part of the Government's work will involve trying, with other countries, to enable Taiwan to play the full part that her economic power dictates she should play.
That having been said, these are serious times in Taiwan. I hope that the international threshold of anxiety will be lowered. That will be to the advantage not only of Taiwan, but of Hong Kong, of China and of her reputation in the rest of the world.

The Minister of State, Foreign and Commonwealth Office (Mr. Jeremy Hanley): My hon. Friend the Member for Corby (Mr. Powell) has done the House a service by raising the important and topical subject of Taiwan. The tribute paid to him by the hon. Member for Leeds, Central (Mr. Fatchett) is wholly appropriate and agreed by all hon. Members.
In 10 days' time, the people of Taiwan will go to the polls to elect their President—the first time that they have had the opportunity to do so. It represents the last stage in the development of democratic institutions in Taiwan, a development that hon. Members can only welcome and applaud. It is therefore a matter of grave concern that the People's Republic of China should be conducting missile tests and military exercises with the apparent aim of influencing those elections and of intimidating the electorate.
Four missiles have been fired into the sea near Taiwan's two main ports. Aviation and shipping have been warned to avoid an extensive area near the Chinese coast in the strait of Taiwan, where the exercises will include live firing. Such activities have caused anxiety to people in Taiwan—including the British community there—in Hong Kong and throughout east Asia. They have led the United States of America to take precautionary action. Anything that affects the stability of the region that includes Hong Kong affects us all.
Let me make the Government's position clear. We acknowledge the Chinese Government's position that Taiwan is a province of China. The Taiwanese should be singularly ill advised were they to proceed to a declaration of independence or some similar initiative. Our understanding is that the Taiwanese authorities seek negotiations about reunification, not independence. That echoes the view of my hon. Friend the Member for Harrow, East (Mr. Dykes).
Equally, on the Chinese side, we have no current reason to believe that the present activity is the prelude to a military attack on Taiwan or that the Government of the People's Republic have abandoned their long-standing policy of seeking peaceful reunification, the policy repeated by the Chinese premier Li Peng to our Prime Minister less than two weeks ago. Nevertheless, it is clear that the present position has heightened tensions in the region and is potentially dangerous—indeed disastrous. There is a risk of error or a miscalculation that could have the most serious consequences.
Taiwan is one of the economic powerhouses of east Asia. It is the 14th largest trading entity in the world. As my hon. Friend the Member for Corby said, its foreign exchange reserves are the second largest in the world—they are second only to Japan. For its security, Taiwan has always looked to the support of the United States, which has already backed up its warnings about the seriousness of the position by moving two task forces near to Taiwan. We support and welcome the sensible precautions that the American Government have taken.

Mr. Hartley Booth: My right hon. Friend widens the point to encompass the whole world. Those of us who are concerned about Taiwan and China are obviously here this morning for that reason. Is it not right also to widen the debate so that concern for democracy is shared world wide? Even if we support Beijing, we do not want it to force the extinguishment of democracy as it begins in Taiwan.

Mr. Hanley: I can only agree with my hon. Friend. That is why I welcome the elections in Taiwan, which should not be interfered with by anyone outside, not even China.
The risks of any escalation of the present crisis should be evident to all. I hope that all concerned, but especially the Government of the People's Republic of China, will pay heed to the dangers and proceed with the greatest possible caution and restraint.
That has been the central message of our own public statements about the matter and of the statement issued at the end of last week by the European Union. The Prime Minister expressed our concerns directly to the Chinese Prime Minister Li Peng when they met in Bangkok at the recent Asia-Europe meeting. We are continuing to follow the development of the situation extremely closely and will take all further opportunities to urge restraint and peaceful resolution of differences.
Such a path is not only in the interests of Taiwan and the east Asia region, but it is very much in the interests of China itself. Even though direct trade is still not permitted by the Taiwan authorities, Taiwanese companies have been among the largest investors in mainland China and the indirect trade is worth billions of dollars. My hon. Friend the Member for Corby alluded to that.
The astonishing economic transformation of the coastal provinces of China has, as my hon. Friend rightly said, benefited greatly from this infusion of capital and business acumen from across the Taiwan strait. These substantial economic benefits would be put at risk if the present crisis were to escalate out of control. There could also be consequences of particular importance for us in Britain—but also for China—if the situation led to a drop in confidence in Hong Kong.
I do not wish to be alarmist. The evidence we possess points to intimidation and bellicose activity, but not an attack. The risks at this stage are potential rather than actual. If all sides act with good sense, as I hope and believe they will, calm should return and tensions be relaxed. I believe that all in this House will join me in expressing concern at the demonstrations, which are unnecessary and an over-reaction, and in urging the utmost restraint.
I have so far spoken of the relations between China and Taiwan, as they are the subject of the greatest topical interest. I want now to put on record the flourishing links between Taiwan and this country. Although, like our main western partners, we have no formal diplomatic relations with Taiwan, it has become an important partner for us in terms of trade, investment, tourism and educational exchange. We continue actively to promote those links that are of considerable benefit to both sides. So far, 11 Ministers have visited Taiwan in pursuit of those objectives. Only recently, three of my ministerial colleagues from the Scottish Office—it is good to see the one they left behind, my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) on the Bench this morning—and from the Departments of the Environment and of Health visited Taiwan to secure further commercial opportunities and inward investment for the United Kingdom.
The centre of our activity is our unofficial office in Taipei, the British trade and cultural office, currently under the direction of Alan Collins. The office boasts seven front-line commercial staff dedicated to helping British business. Its cultural section has an excellent record in attracting Taiwanese students to the United Kingdom. Several high-profile events were staged last year, including the British festival in Taipei and a British promotion in Kaoshiung. More events are planned for this year to enhance British interests. The active British chamber of commerce in Taipei, which the DTI helped to establish several years ago, also offers help to British business men. The DTI holds regular talks with the Taiwan authorities on a wide range of trade issues to improve access to the market.
My hon. Friend mentioned the work done by the Taipei representative office in London. Our lack of diplomatic relations means that we cannot afford Dr. Eugene Chien and his colleagues the privileges and immunities that go with diplomatic status, but we do make every effort to minimise any practical inconveniences that they may face. We believe that they share our aim of developing the practical links between Taiwan and the United Kingdom.
In this regard, I believe that our record speaks for itself. Last year our exports amounted to £962 million, a remarkable increase of more than 30 per cent. on 1994. Recent commercial successes included Davy International's £75 million contract from the China Steel company to design and build a new blast furnace. British companies are in the running to construct both a high-speed rail link between Taipei and Kaoshiung and an £8 billion metro project in Kaoshiung. The Government are committed to offering all the practical help they can in pursuit of those opportunities.
British firms are also showing their commitment by investing in Taiwan. Glaxo has completed a major pharmaceutical plant in Hsinchu and Kingfisher B and Q

has signed a joint venture worth £10 million and is setting up a pilot do-it-yourself home centre store in Taiwan, which is due to open in March this year. Eagle Star has signed a joint venture to create Eagle Star Insurance Life, whose operations are due to start very soon. ICI plans to build a second chemical plant for completion in 1997, which would put its investment in Taiwan well in excess of half a billion US dollars.
The United Kingdom is also an increasingly attractive location for Taiwanese investment, as my hon. Friend rightly said. In the past, Taiwanese manufacturing investment has been mainly concentrated in the USA and east Asia. The first investment in Britain was when Tatung set up a manufacturing plant in Telford in 1984. Over the past five years, the United Kingdom has become the preferred European location for a further 10 companies with a range of products from penicillin to hard disk drives.
The announcement in November 1995 of the Chunghwa investment of £260 million to build a plant in Lanarkshire, creating 3,300 jobs, is a sign of things to come. It is the largest so far by a Taiwanese investor in the United Kingdom and, I might add, the largest single investment by a Taiwanese company in Europe. We expect it to generate more inquiries from smaller companies wishing to follow Chunghwa's lead.
It is important that we remain active in Taiwan to capitalise on the potential for further investment opportunities on the back of our recent success. The United Kingdom offers a highly attractive environment to Taiwanese companies, with a skilled and flexible work force and a warm welcome from local and national Government.
In recent years we have also made significant efforts in the area of education to attract Taiwanese students to the United Kingdom. An education fair, with representatives' attending from all major British colleges and universities, is held every year. There are now more than 10,000 Taiwanese students at British colleges and universities and the number continues to grow. We are also benefiting from an increasing flow of Taiwanese tourists and business visitors, especially since we simplified visa procedures in December last year.
All this represents a record of solid achievement in deepening the practical links between Britain and Taiwan. Despite our lack of diplomatic relations, we remain wholeheartedly committed to developing closer ties. We see great potential in the future for the promotion of United Kingdom exports and investment, attraction of tourism and the promotion of educational links in the United Kingdom and Taiwan.
Although much has been done, much more could be done. We intend to work closely with British companies to ensure that they take full advantage of the opportunities. We will continue the partnership between the British Council and the universities to promote educational contact. We will intensify our campaign with the regions of the United Kingdom to attract investment and create jobs for British workers at Taiwanese-owned factories. That requires a sustained effort. In the United Kingdom, investors have access to the European single market, but retain the freedom to run their businesses as they wish—and an overseas investor in the United Kingdom has all the rights and privileges of a British investor. No wonder we are doing so well together.
I know that the House will join me in congratulating my hon. Friend on what he had to say about the excellent relationship between Taiwan and the United Kingdom. The fact that he spoke without a note in his hand shows that he spoke from the heart. There are many here who hold Taiwan in their hearts.

Mr. Charlie Thom

1 pm

Mr. Brian H. Donohoe: This debate has been rather overshadowed by events in Scotland today. I understand that at Dunblane primary school in Dunblane 13 children and two adults have been killed and eight others have been injured. I offer my sincere condolences to the families and relatives of those killed or injured in the tragedy. I understand that, later today, formal statements will be made by the Leader of the House and the shadow Leader of the House. I also understand that the Minister of State wants to say a few words, and I give way to him.

The Minister of State, Scottish Office (Lord James Douglas-Hamilton): The whole House will share the sense of distress, horror and outrage that children lost their lives at Dunblane primary school this morning in an appalling incident. The whole House will wish the deepest sympathies to be expressed to the families of the victims and to the families of those who have been injured. My right hon. Friend the Secretary of State for Scotland and the hon. Member for Hamilton (Mr. Robertson), the shadow Scottish Secretary, left this morning to travel to Dunblane, and I understand that the Under-Secretary of State responsible for education, my hon. Friend the Member for Aberdeen, South (Mr. Robertson), is already there.
The House should expect a full statement to be made as soon as all the facts have been established. My right hon. Friend the Leader of the House will confirm the arrangements for a statement at 3.30 pm today.

Mr. Donohoe: I am grateful to be able to present the case in this short Adjournment debate of Charlie Thom of 35, Ashgrove road in Kilwinning, which involves a march-fence division wall. The case could be considered to be very complicated. Indeed, from reading several documents and letters concerning it, I consider it complicated. I shall try to make it as simple as possible and break it down into three different sectors. The first concerns the courts, the second concerns politicians and the Government and the third concerns the Scottish Law Commission.
I shall try to approach the matter from a simple commonsense point of view and outline the case briefly. I understand that the wall was built in the early 1950s and that a wooden fence was subsequently built next to it without Mr. Thom' s permission. Lord Jauncey, the Lord Ordinary, heard the case over 28 days in 1987 and, on 24 April 1987, came to the conclusion that the case was not made by Mr. Thom. He said that huge sums of money had been spent in defending and prosecuting the case. It has been estimated that more than £50,000 was spent—concerning a wall that cost between £700 and £1,000 to build.
In the opinion of the pursuer, Mr. Thom, Lord Jauncey' s statement ignored all previous decisions. To find case history, one has to go back to the 19th century, when there were five cases that specifically concerned boundary walls. The first such case was Wallace v. Brown on 21 January 1808, and the last was Cochran' s Travellers v. Caledonian Railway Company in 1898.
Mr. Thom argues that Lord Jauncey came to his conclusion on the basis of tenement gable cases in the 1900s and took into account the minority view of the last case in the previous century, to which I have referred. Lord Jauncey concluded:
However I can see no reason why the principles of law applicable to the interest in a gable built half on A's land and half on B's land should differ from the principles applicable to the simple division wall similarly built".
I understand that the Scottish Office Minister became involved on 27 October 1987, when he wrote:
The Secretary of State cannot interfere in the judgements of the courts. Such judgements can only be overturned in the normal manner by appealing to a higher court and Mr. Thom should consult his own solicitor regarding this.
Two Lord Advocates became involved in the case. The first, Lord Cameron of Lochbroom, said on 21 December that Mr. Thom should refer the matter to the Scottish Law Commission, as did his successor, Lord Fraser of Carmyllie, on 2 March 1992.
At about the same time, Mr. Thom wrote to the Faculty of Advocates, and on 4 June 1993 was told by the dean of the faculty to take the matter up with the deputy principal clerk of session. That had disastrous consequences for Mr. Thom, of which I am sure the Minister is aware. It has caused such a delay that the case has still not been considered by a judge.
After a fairly lengthy written and verbal dialogue with Mr. Thom, the third vehicle in the case, the Scottish Law Commission, produced a consultation document in June 1992. It was very supportive, as was a letter from Lord Davidson, the chairman of the commission. Shortly before the research undertaken by the commission on the subject was completed, Lord Davidson said:
case law on the subject is in disarray".
I would argue that there is a remedy. It is clear that the law on dividing walls is in total disarray. The law faces two ways and there are two lines of decision that cannot satisfactorily be reconciled. It is clear that my constituent no longer has any confidence in the Scottish legal system—and with some justification, given what I have described. The extent of the events that have occurred in the Scottish Court Service is astonishing, as I understand the Minister is aware.
What can we do to remedy the situation? For one part, compensation is due. We need only to approach the matter from a commonsense point of view. Everyone knows that it is not possible to own half a brick, yet the judgment seems to suggest that it is. As it is not possible to own half a child, it is certainly not possible to own half a brick. Such a premise makes a nonsense of the law, and the law falls into disrepute in the eyes of the public as a result.
Lord Jauncey had absolutely no right or power to change the law. As I understand it, to change a point of law in Scotland, five judges sitting together are required to make a majority decision. A single judge does not have that power.
The only other two ways in which the law can be changed are through the House of Lords, on a case basis, and through the House of Commons, by statute or by parliamentary order. Those are clearly not open to Mr. Thom. In terms of his rights of appeal, it would be nonsense for him to approach the case from the angle suggested by many people. The use of judicial discretion in the case has been highly questionable.
The most recent annual report of the Scottish Law Commission said that the case would have to be set aside because, as with other cases of equal importance, more resources are needed from the Government to continue with it. The Government must examine the resourcing of the Scottish Law Commission. In my discussions with the commission, that fact has been clearly borne out.
The time spent on the case has been inordinate. My constituent has been almost literally banging his head against a brick wall for more than 15 years. He feels that the system of law has been ganging up against him, and that there has been some form of collusion. So far as I can determine, all facets of the law suggest that he has a right of appeal. The Scottish Law Commission alone stands against that possibility.
About 3,000 years ago, in a book called the Mishnah, the Jews determined what would happen if two parties decided to build a dividing wall:
If they acted with each other's consent, they should build the wall in the middle and make the boundary mark on either side; hence if the wall fell down the place and the stones belong to them both.
I fail to understand why, if the Jews could get it right 3,000 years ago, the Government in Scotland cannot get it right after more than 10 years.
I hope that the Minister will not sit on the fence, so to speak, for another 10 years. Mr. Thom is becoming an old man; he is 79 years of age, and I argue forcefully that he deserves justice today.

The Minister of State, Scottish Office (Lord James Douglas-Hamilton): I congratulate the hon. Member for Cunninghame, South (Mr. Donohoe) on obtaining this Adjournment debate. I have studied the issue closely, and there is one issue of concern to me that may provide the basis for some claim for recompense—the failure of an officer of the Court of Session to process Mr. Thom's application for a reduction of Lord Jauncey's judgment in 1993. If the hon. Gentleman or Mr. Thom believes that that failure led to additional or abortive costs for Mr. Thom, I ask them to let the chief executive of the Scottish Court Service or myself have details so that consideration can be given to an ex gratia payment to cover those additional costs.
I shall describe to the hon. Gentleman and the rest of the House the present legal position. "Common property" means a single piece of property jointly owned by two or more people. "Mutual property" means a piece of property of which two or more people own a part. The law on boundaries is mostly common law not statute law, and it is interpreted by the courts in the circumstances of the time.
The modern interpretation of the law on garden boundary walls is that each neighbour owns his own half of the wall. The two neighbours have a shared interest in the upkeep of the wall as a whole. That interpretation of the law formed the basis of Lord Jauncey's judgment against Mr. Thom in 1987. In effect, he ruled that the garden wall was mutual property, whereas Mr. Thom had argued that it was common property. That interpretation of the law has been in place since 1886, and the leading authority on property law, "The Laws of Scotland Stair Memorial Encyclopaedia", says that


The modern law
on boundary walls
is not now in doubt".
The Scottish Law Commission is now examining the subject of property law, including the law relating to boundary walls. We shall consider carefully any recommendation that it makes in due course. In the meantime, there is no reason to say that the law is unclear or in disarray.

Mr. Donohoe: Surely the Minister must recognise the fact that the Scottish Law Commission has been dealing with the case for seven years. We require a decision in the near future, not one that will take two, three or four years. Some effort is needed, because the Law Commission has no resources to complete the consultation process and present to the necessary authorities the solution to the problem.

Lord James Douglas-Hamilton: My understanding is that the Law Commission is considering its conclusions, which will reach the Government without undue delay. I shall certainly ensure that the commission is made aware of the hon. Gentleman's concern that the matter should be processed without unnecessary delay.
I shall now deal with some of the specific issues that the hon. Gentleman raised. First, he asked about the description of the boundary wall in Mr. Thom's title to his property. In the title deeds, the wall is described as mutual property between the two householders. The hon. Gentleman argued that the terms "mutual property" and "common property" mean the same thing, but I must disagree. That was a key point argued by Mr. Thom in his original case before the Court of Session, and one that Lord Jauncey considered closely in his judgment.
That judgment distinguishes clearly between the idea of mutual interest in property and the legal concept of common property. Lord Jauncey refers to that distinction as it applies in many areas of property law. Put simply, mutual interest means very much what the ordinary sense of the term implies: both parties share an interest in the overall piece of property, although they separately own only individual parts of it.
Having property in common involves a much closer relationship, because the parties are held to be joint owners of the whole property and therefore have to agree about how any part of it is treated, and share the costs of upkeep. As I made clear earlier, the law as it stands treats garden walls, such as Mr. Thom's wall, as mutual between the householders and not as common property. That is a sensible approach.
Indeed, it could be argued that treating a garden wall as common property in the strict legal sense would raise a lot more problems than it would solve. For example, should it be necessary for the party on one side of the wall to get agreement from his neighbour before he can fix a trellis to the wall and grow roses up it? That could be the effect of regarding such a wall as common property. If a garden wall built on both sides of the dividing line between two pieces of ground is regarded as common property, should the ground on which the wall is built not also be regarded as held in common?
The hon. Gentleman also suggested that the papers issued by the Scottish Law Commission following Mr. Thom's case implied that the commission—

Mr. Donohoe: On the question of a common wall versus a mutual wall, does the Minister not concede that the Thom

case itself changed the definition? Before that, all case law was seen by others as based on 18th and 19th-century case history, and Lord Jauncey could show nothing to suggest that a change had taken place between the 19th century and the 20th century. Clearly from a commonsense point of view, nobody could understand what a "mutual wall" means in real terms. Does not that demonstrate a fundamental failure in Lord Jauncey's approach, in terms of common sense?

Lord James Douglas-Hamilton: The modern interpretation of the law on garden boundary walls is that each of the neighbours owns his or her own half of the wall concerned and they have a shared interest. The hon. Gentleman may disapprove of that, but that is the position. The hon. Gentleman may want to return to the position as it was hundreds of years ago, but I suspect that, were we to do that, many people would argue that we should bring the law up to date.
We are awaiting the conclusion of the Scottish Law Commission, which I hope will not take too long. I strongly disagree with the hon. Gentleman's view that "common property" and "mutual property" mean the same thing. The consultation paper issued by the commission makes clear distinctions between the technical meaning of "common property" and the sense of the term "mutual property".
The paper refers specifically to the outcome of Mr. Thom's original case, not to Mr. Thom's view of the law. It also says that the paper is published
for comment and criticism and does not represent the final views of the Scottish Law Commission".
As the commission has still to complete its report on those issues, its final views are not known.
I was interested to hear what the hon. Gentleman said about Jewish law on boundaries between property. I admit that much of that was new to me, but the Scottish Office is always ready to consider and learn from good practice from other jurisdictions and I should be grateful if the hon. Gentleman would let me have papers on the Jewish legal framework. We shall study them with considerable interest.
The hon. Gentleman described the law on boundary walls as being "in disarray" and said that the interest shown by the Scottish Law Commission in Mr. Thom's case showed that the commission supported that view. The law is not in disarray. I draw the attention of the House to the firm statement about the law on boundary walls made in paragraph 223 of the current edition of Stair's "Laws of Scotland":
The modern law is not now in doubt … each proprietor owns to the mid-point".
I am aware of no justification for the suggestion that the Scottish Law Commission supports the idea that the law is "in disarray". The commission has a long-standing project reviewing the whole law of property, the feudal system and the law of the tenement. It has included in that project consideration of the law on boundary walls. It issued its consultation paper in 1992 and has yet to issue its conclusions. If the commission had believed that the law on boundary walls was in a critical condition, it would have made specific recommendations on the subject much earlier.
Following on from that point, I should address the hon. Gentleman's concern—

Mr. Donohoe: rose—

Lord James Douglas-Hamilton: May I develop this point? I should address the hon. Gentleman's concern that the commission's review of the issues surrounding property law has taken a long time. The commission's considered views on the specific legal issues relating to boundary walls will not be available for some time but, as I explained, the commission takes the view that there are many detailed and related issues covering the whole law surrounding property where interests may overlap or be shared. The commission wishes to explore all those issues carefully before producing final views about any aspect of property law. The commission is right to take a prudent approach. The hon. Gentleman eloquently argued the importance of the law relating to property, especially domestic property. It is important that all the complex and related issues should be carefully considered.
On the issue of compensation for Mr. Thom, I am sure that the hon. Gentleman will accept that there can be—

Mr. Donohoe: Obviously the Minister was not listening to what I said about the Scottish Law Commission. Viscount Davidson, the chairman, wrote to Mr. Thom on 16 October 1990 to say that, having researched the matter, he believed the law to be in disarray. That was in 1990; here we are in 1996, and nothing has been resolved. The latest-30th—annual report of the Scottish Law Commission says about boundary walls:
Because of the need to divert resources to more urgent matters. this project has been temporarily suspended.
That gives no sign of the urgency that should be applied to the matter by the Government and legal departments.

Lord James Douglas-Hamilton: The hon. Gentleman may believe that changing overnight the law on such an issue, the interpretation of which is clear in the courts, would solve many problems, but it might create many more problems. It is the job of the Scottish Law Commission to investigate all the complexities surrounding the matter and reach conclusions. That it will do, and it would be wrong for the Scottish Office to try to pre-empt its consideration because, if it were to do so and it introduced legislation, that legislation might have to be changed immediately in the light of all the evidence.
The hon. Gentleman draws only one case to the attention of the House.

Mr. Donohoe: rose—

Lord James Douglas-Hamilton: May I go on to discuss consultation? I am sure that the hon. Gentleman will accept, as I do, that there can be no suggestion of compensation for costs arising from the original court case. Mr. Thom initiated the action against his neighbour at his own instance and chose to persist in that action. The judge found against Mr. Thom and awarded restricted expenses against him. It would be wrong for the Scottish Office to take a different view and award compensation to Mr. Thom, and it would be unfair to the other party in the case, his neighbour, who is also a constituent of the hon. Gentleman.
I can see no case for compensating Mr. Thom for costs that he incurred in pursuing his view of the law with the Scottish Law Commission and others; he did so by choice.

Although the commission has been grateful for Mr. Thom's detailed submissions, it does not necessarily share Mr. Thom's view of the law, although it did use some aspects of the original case as material in its 1992 consultation paper. That paper records the position of both sides in the dispute and, of course, Lord Jauncey's judgment.
The hon. Gentleman mentioned a possible judicial review of Mr. Thom's case. I am sure that the hon. Gentleman appreciates why I cannot respond directly: it is for the courts, not the Scottish Office, to decide on individual legal cases. In this instance, Mr. Thom has unsuccessfully sought to bring his case to appeal and has since tabled another application to the Court of Session, which remains outstanding, so it would be inappropriate for me to comment on that aspect of the case at this stage.
The current law in Scotland in relation to domestic boundary walls is clear. Both householders own their half of the wall and they have a shared interest in the wall as a whole. That is a practical and commonsense view, and I suspect that many householders regard it as sensible. There may be a case for placing the current law on a statutory footing, but that issue can be argued with intensity both ways and it is best tackled when we have the considered views of the Scottish Law Commission on all related property law issues.
Finally, while I admire the tenacity shown by the hon. Gentleman's constituent in pursuing his view of the law, I cannot support his or the hon. Gentleman's conclusion that the law relating to boundary walls requires urgent change. The view of the law that Mr. Thom holds is based on judgments made in the 19th century. I cannot help feeling that, if the original case had gone in favour of Mr. Thom, we might now be debating whether a more modern interpretation of the law was required—perhaps at the instigation of another constituent of the hon. Gentleman.
I am grateful to the hon. Gentleman for raising this matter, and Mr. Thorn's energy and application in pursuing a complex point of law are worthy of remark. Mr. Thom's case is a telling example of how a small domestic dispute can involve complex legal issues.
I consulted "The Laws of Scotland Stair Memorial Encyclopaedia" on boundary walls and fences. It begins with a short paragraph that hon. Members may believe sounds a warning note. In earlier times, boundaries, or "marches" as they were known, were set out with markers called march-stones, rather than walls or fences. March-stones could be moved and so were not entirely reliable. Stair records:
When march-stones are solemnly set, boys used sometimes to be laid upon them and sharply whipt, whereby they will be able to remember,*and be good witnesses as to those marches when they are old, that impression on their fancy lasting long.
The more modern use of boundary fences and walls may lead to some difficult legal problems, but at least small boys can rejoice in that connection.
As I understand it, the original case involving Mr. Thom began as a result of long-standing disagreement between him and his next-door neighbour. It centred on the boundary wall between the two properties. In 1982, Mr. Thom's neighbour created a fence along her side of the boundary wall. Mr. Thom argued that the erection of the fence had damaged the foundations of the wall and that the action of the wind on the fence caused further damage to


the wall structure. In 1983, Mr. Thom raised an action in the Court of Session seeking a declaration that the wall was common property and that his neighbour should do nothing that would affect the wall without his consent. He sought to have the fence removed and the wall restored to its original condition.
The case was strongly contested on both sides, with Mr. Thom representing himself from a very early stage in the proceedings. By the time the case came before the court, the judge, Lord Jauncey, was so concerned about the expense of money and time on the case that he tried to encourage the parties to settle their dispute between themselves. He pointed out that the combined cost of replacing both the fence and wall was only about £2,000.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. Time is up.

Electricity Generation (Billingshurst)

Sir Peter Hordern: I have to tell the House a cautionary tale of an event that has occurred in a beautiful part of my constituency, called Five Oaks, which lies between Billingshurst and Slinfold. It is an example of what can happen under existing planning legislation through expansion, by stealth in this case, by the utilities.
Without warning, in an attractive rural area, but close to a number of residential properties, a substantial diesel-fired 10 MW power generating station has been added to the three transformers and small brick shed that previously stood on the site.
The site itself has expanded, and the character of the undertaking has totally changed. The five new diesel generators, with tall gleaming chimneys, together with two massive oil storage tanks and associated pipework, completely dwarf the original set of buildings. The oil tanks and the associated pipework lie outside the fenced enclosures that formed the original transformer station.
The new installation is quite unprotected against vandalism. No proper precautions were taken against the leakage of oil and chemicals into the site and thence into the adjoining watercourse. That is exactly what has happened, with neat diesel being discharged from a field drain from the site.
Mr. Kelly, the clerk of Slinfold parish council, has told me that the council was given no notice of the development. He also told me that a fire has occurred, and a spillage of ethylene and 100 litres of diesel oil, which have polluted the river. That river is next to the watercourse, which flows into the Adur river, a short distance to the south. It is clear from what has happened that the development is a major potential hazard.
The other environmental consequence to consider is the damage caused by noise and the smell of diesel as a result of the plan to operate the generator for three hours every day. The five new generators and chimneys are visually obtrusive in the rural landscape, and it amounts to an industrial eyesore in one of the most beautiful parts of West Sussex.
The local community was offered no notice or opportunity to comment on that industrial intrusion. When I heard about it, I naturally took it up with the company concerned, Southern Electric. Mr. Wilson, the chairman, replied that the reliability of electrical supply to the area had given cause for concern since the storms of 1987. The generators were necessary to improve reliability. He did not just stress the reliability of supply, because he said:
In addition, small generating sets will be operated whenever pool prices of electricity is greater than the cost of generation. This is expected to be in the region of 3 to 4 hours on a winter's week day, and electricity wholesale prices have reached record levels recently.
He went on to describe the efforts taken to minimise the effects of noise and emissions as well the visual impact of the development. It seems to me that the best way to minimise them is not to build the plant in the first place.
The project was apparently discussed with the planning department of Horsham district council, which confirmed that it was a permitted development under conditions set out in the Town and Country Planning (General Development) Order 1988.
I wrote to the Minister for Industry and Energy and asked him why those units, if they had to be built in the first place, could not have been built in an existing industrial zone. I wrote to the chairman of Southern Electric and asked him why he had not consulted local people. I asked him how he would like to wake up one morning to see a large diesel-fired 10 MW power generating station erected outside his office in Littlewick Green. I never had a reply to that point.
I also wrote to the Secretary of State for the Environment, asking him to call in the application, because I could see no reason why that type of development could not occur piecemeal all over the country. I wonder whether that is what the Government are prepared to see. Of course electricity companies want to make the best use of technology, but that natural desire should be measured and weighed against environmental issues in the normal planning process.
The Secretary of State replied to me on 19 January and said that he understood that Southern Electric constructed the station under permitted development rights comprised within part XVII of the Town and Country Planning (General Permitted Development) Order 1995. My right hon. Friend told me that, notwithstanding that statutory undertakers were not required to submit a formal planning application, they had agreed to consult the local planning authority and to publicise their intentions locally well in advance of work starting. In the case of Five Oaks, that, regrettably, was never done. Horsham district council says that Southern Electric's contact was informal, and quite unrelated to whether there would be any significant effect on the environment.
It is possible, apparently, for local planning authorities to make directions under article 4 of the general permitted development order to bring specific cases of permitted development within the scope of the development control system. That is possible, however, only in advance of the development, and depends, of course, on the planning authority being told exactly what the electricity company has in mind.
In any event, any such direction must be cleared subsequently by the Department of the Environment. The record to date shows that the Department seldom overturns the judgment of the local authority. So not only does the local authority require the endorsement of the DOE, but it may find that it is necessary to pay compensation for any development that is not carried out.
There then followed a meeting between Southern Electric and local residents, which should have been held long before, during which the company admitted that there had been just one failure on the 33 KW line during the past three years. There was therefore no need for undue excitement on its part to build the extra plant.
I then heard from Lord Crickhowell, who hon. Members will know is the chairman of the National Rivers Authority. He wrote to me saying that the installation of such a generating station falls outside the control of the planning authority and Her Majesty's inspectorate of pollution. Why should that be? After all, pollution is pollution wherever it occurs and whatever the size of the development.
Moreover, it appeared from the meeting with local residents that the plant is on call to the grid and Southern Electric's supply company. That demonstrates not only that

it was intended that the plant should generate extra power for distribution, but that assurances about operating hours were without meaning. So the plant can be called upon whenever commercial logic informs the generating company that it would be wise to use that extra power rather than to rely on the grid. That was never revealed to Horsham district council. It is therefore not merely a plant erected to cover shortages of supply, but a commercial undertaking.
Residents were told that, in an emergency, staff would be summoned from Petersfield, which is about 45 minutes away. They discovered that no arrangement had been made with the fire brigade. It was at that point that the Council for the Protection of Rural England became interested, and lent its support, mentioning not least the fact that, if such a development were to be allowed at Five Oaks under the permitted development legislation, there would be no reason why such developments should not occur in other parts of the country as often as generating companies wanted them.
My hon. Friend the Minister for Small Business, Industry and Energy told me that the procedures under the general development order would not apply where a station had a capacity of more than 50 MW. There lies the beginning of a solution. If that is the case, why do we not reduce the limit from 50 MW to a much lower figure? Southern Electric is planning a 40 MW station near Reading, and perhaps four or five others.
If Southern Electric is planning to do that, what about all the other electricity generating companies? Under existing legislation, they may find it possible to use the latest technology to put up such generators all over the country in the most beautiful rural areas—including yours, Mr. Deputy Speaker. This is a matter of great importance.
What is to be done? My right hon. Friend the Secretary of State will not call in the application, because it is impossible to do so when permission has been granted by the local authority. He says that he is satisfied that the present system whereby the statutory undertakers consult local planning authorities and publicise proposals which would have a significant effect on amenities and the environment works well. He is not persuaded that he should amend the general development order in respect of the permitted development rights of statutory undertakers.
However, this is a case in which the existing system has not worked as intended. I was therefore pleased to learn that my right hon. Friend the Secretary of State intends shortly to seek tenders for a research programme on the use of permitted development rights by statutory undertakers as part of the Department of the Environment's planning research programme for 1996–97.
I understand that the project would, among other things, establish the extent to which statutory undertakers rely on permitted development rights to carry out their activities—here is evidence for them—consider the scope for those rights to be altered, and examine the operation and effectiveness of the non-statutory consultation arrangements.
I hope that this short debate may be drawn to the attention of the researchers and amenities societies, which may have an interest in the matter. The case has shown that the statutory undertakers do not always conform with what is expected of them. They do not always tell planning authorities all they should about their intentions, nor do


they consult local people when they should. The result is that electricity generating stations can spring up all over the country, without heed to environmental considerations and without consultation with local people.
One idea might be to limit developments under the existing legislation to, say, 30 MW, and to limit them to existing industrial areas. Why should it be necessary to generate electricity in the most beautiful rural parts of the country when so many industrial zones are available where less objection would be made? Surely it is desirable to do that rather than to have such developments in beautiful countryside like Five Oaks; otherwise, there will be much more invasion of the countryside as power generation technology improves.
I am glad to have had the opportunity to raise what could be a nationwide problem, and I look forward to what my hon. Friend the Minister has to say.

The Minister for Construction, Planning and Energy Efficiency (Mr. Robert B. Jones): I am delighted to have the opportunity to reply to the debate, because my right hon. Friend the Member for Horsham (Sir P. Hordern), in all his years in the House, has managed something rare—a reputation both for the breadth of his knowledge on key national and international issues, and for being an assiduous constituency Member. On this issue, as on others, he has been tireless in representing his constituents' concerns. He has put his case today with characteristic fairness and accuracy, and so thoroughly that he has almost taken the words of my reply out of my mouth.
My right hon. Friend knows that some Horsham district councillors raised the matter with me on my recent visit to Horsham, and I recognise the concerns that it has aroused. Before I reply, I should like to say how much I was impressed by the town centre development in Horsham, and I congratulate all those who were involved with it. It is encouraging to see a thriving town centre into which a lot of thought has gone, and some fine new buildings.
I have listened carefully to the points made by my right hon. Friend. I hope that he will find it helpful if I first explain the legislation that controls the sort of development carried out at Slinfold, and our role, and that of the local planning authority.
Electricity supply companies, like other statutory undertakers, have permitted development rights under the Town and Country Planning (General Permitted Development) Order 1995, or GPDO. Those rights enable them to carry out certain developments that are necessary for them to perform their day-to-day activities without having to make planning applications.
The rights were given to statutory undertakers because they provide a service to the public and because it was felt that it would be unreasonable and inefficient to require them to make a planning application for routine development on every occasion. Part XVII, class G of the GPDO sets out the permitted development rights for electricity undertakings in connection with the generation, transmission or supply of electricity. Any development beyond the permitted rights as set out in part XVII requires planning permission in the normal way.
In exceptional circumstances, as my right hon. Friend said, a local planning authority may consider that the permitted development rights granted by the GPDO

should be withdrawn. In such cases, they may make a direction under article 4 of the general development order, withdrawing the permitted development rights and requiring specific planning permission. Permitted development rights have been approved by Parliament, and consequently should not be withdrawn unless the circumstances are exceptional and the planning grounds for doing so compelling. Such a direction requires the approval of the Secretary of State before it can come into force.
Measures were introduced in June 1995 relating to permitted development and environmental assessment. They mean that, under certain conditions, development under permitted development rights, which normally does not require a planning application, will need formal planning approval if environmental assessment of the project is required.
The measures include a provision for developers to seek an opinion from the local planning authority, with a right of appeal to the Secretary of State, as to whether a particular permitted development project should be subject to environmental assessment, and hence whether a planning application, accompanied by an environmental statement, is required.
Development that is covered by the permitted development order does not require statutory consultation or publicity. However, it is considered desirable for there to be arrangements for advance publicity for individual proposals where appropriate. Arrangements for consultation are explained in paragraph 33 of the Department's circular 15/92, "Publicity for Planning Applications", and in paragraphs 9 to 12 of circular 9/95, "General Development Order Consolidation 1995".
The circular states that, although not governed by statutory provisions for publicity, statutory undertakers exercising their permitted development rights should inform both local planning authorities and the public of developments likely to have a significant effect on the amenity and environment well in advance of work starting. Where a proposal is notified to the local planning authority, adequate time should be allowed for it to consider whether it should advertise the proposal, and for discussion of ways in which the proposal might be amended to overcome any planning objections.
It has been suggested—both by those who feel that it could be extended and by others who consider that it needs to be restricted further—that the scope of the rights of statutory undertakers contained in the GPDO need to be reviewed. We have therefore, as my right hon. Friend said, approved a research project into the use of permitted development rights by statutory undertakers that will form part of the planning research project in 1996–97. It is expected that that will take place this autumn.
In the case of the Five Oaks sub-station, local residents have asked whether the Secretary of State could intervene in some way, but I have to tell my right hon. Friend that there is no scope for that where a development has already been carried out under permitted development rights. It is not possible to call in an application for which permission has been granted, in this case under the general development order, and the development completed.
As I have said, in exceptional circumstances it is possible to make a direction under article 4 of the general development order, withdrawing permitted development rights. However, as my right hon. Friend is aware, the


district council maintains that it was given little information on the appearance and potential visual impact of the plant; nor did it have any indication from Southern Electric that the company considered the proposal to have the potential for a significant effect on amenity and the environment.
A consultant's report, commissioned by the company and made available to the council, advised that the development would not affect groundwater or, air quality, or create noise nuisance. In those circumstances, the district council considered it unlikely that it could have persuaded the Secretary of State that the circumstances of the case were so exceptional and the planning grounds so compelling that a direction would be justified.
I understand local concerns that the development has taken place apparently without informal consultation by the statutory undertaker with those most likely to be affected by its impact in terms of amenity and the environment. I was told by Horsham district council that consultation with Southern Electric in advance of the works being undertaken was solely to determine whether permitted development rights applied. Again, on the basis of the information provided by the company, the district council took the view that the generators would be permitted development, and would not therefore require a specific application for planning permission.
In view of the considerable concern about the size of the generators subsequently installed on the site, the council took advice, which confirmed its earlier view that the development benefited from permitted development rights. As I understand it, the critical point is that the generators, flues and tanks that have been installed are regarded as plant and machinery, and can be installed as permitted development without the need for prior approval of design and appearance. Those decisions were matters for the local planning authority as part of its responsibility for the development control system.
It is not for me to comment on the merits of the development, but perhaps wider consultation than that apparently undertaken in this instance might have allayed some of the fears about the operation of the generators and provided an opportunity for negotiation about the visual impact of the development. It is unfortunate that some local residents became aware of the development only when test running of the plant commenced, and certain incidents at the plant gave cause for alarm. I commend the parish council and other residents for their prompt action in pursuing their concerns with Southern Electric and with my right hon. Friend.
Southern Electric has stressed that the generators were placed at the location to improve the service provided to the locality, which should reduce the cost of providing electricity to its customers. Those commercial decisions

are, of course, entirely for the company to make. However, it has recognised that the delay in commissioning the plant, spillage and the temporary failure of the generators to meet the noise specification have, unfortunately, caused local residents some distress.
I am pleased that the company has been able to give certain assurances about improvements in the operation of the plant, which should ensure that the effect on the locality is minimal. It has acknowledged that it may be some time before local residents can accept that the site will have minimal impact, but it has assured them that that is its intention.
When Horsham district council mentioned the matter to me, I suggested that representations from my right hon. Friend direct to Southern Electric might assist in achieving some remedial measures to resolve any outstanding problems. His intervention would appear to have had some good effect, because I understand that the metal flues have now been painted green, which has reduced the impact of the development in the locality.
Furthermore, the district council's chief environmental health officer is currently trying to resolve complaints about noise disturbance with the company. It has been suggested that that may be achieved only by erecting a building over the generators. To do that, Southern Electric would have to give the planning authority precise details of the design and external appearance of the building.
I very much hope that negotiations will continue, and that the problems will be resolved to the satisfaction of the local community. In the longer term, the research that we have commissioned can examine the question whether the permitted development rights of statutory undertakers should be restricted or amended in some way. I shall ensure that my right hon. Friend's concerns are drawn to the attention of my colleagues who have jurisdiction over the non-planning issues. I also confirm that the debate will be drawn to the attention of those involved in the research project, as my right hon. Friend requests.
I hope that I have set the concerns in context. I understand why my right hon. Friend's constituents are worried about the issue, and I assure him that he has done a great service in raising it today.

It being seven minutes to Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

PRIVATE BUSINESS

BODMIN MOOR COMMONS BILL [Lords] (By Order)

Order for Second Reading read.

To be read a Second time on Thursday 21 March.

Oral Answers to Questions — TRADE AND INDUSTRY

Defence-related Equipment

Mr. Nigel Evans: To ask the President of the Board of Trade what was the total value of defence-related equipment manufactured in the United Kingdom and exported abroad in 1995. [18686]

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): Information is not yet available on the total value of equipment manufactured in the United Kingdom in 1995. However, in 1995 British defence equipment manufacturers won export orders worth some £5 billion. This represents 19 per cent. of the world market and retains our position as the world's second largest defence exporter, after the United States.

Mr. Evans: Does my right hon. Friend agree that the export of defence-related manufactured items is important to the United Kingdom because of the balance of trade and for the retention of manufacturing skills, particularly in companies such as British Aerospace, in Samlesbury and nearby Warton in my constituency, and in a number of smaller companies that supply equipment to British Aerospace? Will he therefore ignore the ignorant and politically correct pleas of a number of Labour Members who have asked him to cancel the Hawk order to Indonesia? Does he agree that if we were to go down that route it would be bad news for manufacturing jobs in Lancashire and the north-west, but good news for manufacturing jobs in France, Germany, Spain and other countries that compete with us in this field?

Mr. Lang: I agree with my hon. Friend. The greatest care and consideration were given to the Hawk trainer export licence to Indonesia, to which he referred. In the past few months, I have visited the Lancashire aerospace consortium. I was enormously impressed by the high technological skill of many companies engaged in the defence sector and by the civil engineering activities. My hon. Friend is absolutely right to link the two.

Mr. Barry Jones: Does the right hon. Gentleman agree that the situation would be better if he could say for certain that the future large aircraft will be constructed? Have the French killed off the project by saying that they will not invest in it? I emphasise to him that 2,200 aerospace workers in my constituency make the wings of the airbus family aircraft. If he could say that the British Government are determined that the future large aircraft will go forward and fly, he would give a big boost to my constituency and to other constituencies that have an interest in aerospace, particularly British Aerospace plc.

Mr. Lang: I agree with the hon. Gentleman on the importance of contracts of this kind, and I am glad that he recognises that. However, it would be premature to reach conclusions of the type that the hon. Gentleman invited me to reach—it is essentially a matter for my right hon. Friend the Secretary of State for Defence. I assure the hon. Gentleman that I shall continue to take a close interest in the contract.

Sir John Cope: Will my right hon. Friend bear it in mind that, like other hon. Members, I welcome the jobs and the investment that the defence industry brings to my constituency? Will he make it clear that it is no good us thinking that our great defence companies could function without exports? They could not—not only would we lose exports but we would have to import.

Mr. Lang: My right hon. Friend is absolutely right. If we lost the export market in the defence industries, not only would we have potential difficulties in defence alliances with other countries which would turn to other manufacturers, but it would considerably undermine our high-technology manufacturing base in non-defence activities.

Mr. Harvey: Will the President of the Board of Trade comment on this morning's press reports which anticipate this evening's "Dispatches" television documentary in which it is alleged that the Department of Trade and Industry has part-funded market research into opportunities for British firms to export electric shock torture equipment to security services in middle eastern countries, including Qatar? Can the President of the Board of Trade tell us whether the DTI has funded such research?

Mr. Lang: I cannot comment on a television programme that I have not yet seen, but I can tell the hon. Gentleman that the Government deplore the use of torture or torture equipment and would never knowingly support the export of equipment for such purposes.

Mr. Gallie: I should like to identify with comments made earlier about the sale of the Hawk aircraft. Does my right hon. Friend recognise that there are some 2,200 jobs in British Aerospace in my constituency, where, I might say, there will be great sadness today, as there will be throughout Scotland?
I look to my right hon. Friend to ensure that sales of the Hawk aircraft continue to be made to countries throughout the world because, without doubt, finance from that has created great investment in my constituency.

Mr. Lang: I certainly recognise the merits of the employment created in my hon. Friend's constituency as a result of the activities of British Aerospace.
As regards the other matter to which my hon. Friend alluded, which is a source of great distress to many of us, there will be an opportunity on another occasion to refer to that.

Mr. Bell: I associate myself with the remarks of the President of the Board of Trade and the hon. Member for Ayr (Mr. Gallie) on the great sadness in Scotland today which the whole House shares.
The President of the Board of Trade will remember Lord Justice Scott's recommendation in relation to a consultation procedure on defence-related equipment in terms of empowering legislation, export licensing and procedures. He announced on 26 February that there would be consultation. How far has that progressed, when will the consultation document be published and can the right hon. Gentleman offer us legislation on the Scott report recommendations between now and the general election?

Mr. Lang: We are making as rapid progress as we can in our consideration of those matters and all the other matters on which we gave commitments following the publication of the Scott report. I expect that we shall be in a position to publish a consultation document on the export control legislation in the summer.

Nuclear Electricity

Mr. Pope: To ask the President of the Board of Trade what is his estimate of the total cost to the Exchequer of the nuclear electricity industry following privatisation. [18687]

Mr. Eastham: To ask the President of the Board of Trade what is his estimate of the annual cost to the Exchequer of the nuclear electricity industry following privatisation. [18693]

The Minister for Industry and Energy (Mr. Tim Eggar): The external financing requirement of the nuclear electricity industry is shown in table 6A.5 of the "Financial Statement and Budget Report 1996–97".

Mr. Pope: With the Red Book showing that the cost of privatising the nuclear industry in the first full year after privatisation will cost the Exchequer £650 million, is it not clear now to everybody except the Minister that consumers and taxpayers will be ripped off and that it is about time that the privatisation was stopped in its tracks?

Mr. Eggar: The hon. Gentleman, as he knows, is completely misconstruing the figures. The important thing about nuclear privatisation is that it will transfer significant potential and actual liabilities into the private sector along with the assets that are being transferred into the private sector. Furthermore, the reorganisation of the nuclear generating industry will increase efficiency both in the soon to be privatised entity and of course in Magnox Electric.

Mr. Eastham: Is it not a fact that billions of pounds have been invested by the taxpayer in the industry, yet it is now proposed that it should be sold for £2.6 billion despite an expected profit during the next five years of £2 billion? Is that not a reckless way to use taxpayers' money?

Mr. Eggar: I recognise the point that the hon. Gentleman makes, which is that, with the benefit of hindsight, I am sure that the Labour party would not have made the kind of commitment to expenditure on advanced gas-cooled reactors that it made. I am sure that the right hon. Member for Chesterfield (Mr. Benn) will apologise to his hon. Friend.

Mr. Congdon: Given the benefits that have flowed to the consumer as a result of electricity privatisation, what assessment has my right hon. Friend made of the benefits that are likely to flow from this privatisation?

Mr. Eggar: Clearly, there have already been very significant benefits for electricity consumers following privatisation. The average electricity consumer's bill this year is likely to be about £90 less than it was two years ago. Furthermore, flowing from the decision to privatise the

British Energy part of the nuclear industry, there is likely to be a further significant reduction, in excess of 6 per cent., in bills in future years.
Creating two new competing nuclear generating companies will put pressure on generating prices and will enable the whole generating industry to become more competitive and provide more flexibility, with lower prices for industrial and domestic consumers.

Mr. Battle: Is it not the case that, so far, the Minister for Industry and Energy has proposed flotation to the institutions without liabilities, and that he has then added in some—but not all—of the liabilities? Two weeks ago, a trade sale to the American company Duke Power was proposed, and yesterday a flotation of shares to the general public was suggested. Is not nuclear privatisation already proving to be a bad deal for taxpayers who will continue to foot the liabilities for years to come? Is this not the last desperate dash for cash for a tax bribe in November? Nuclear privatisation should be called off now because it is economically indefensible.

Mr. Eggar: The first part of the hon. Gentleman's question made it clear that he does not understand his brief. The second part of his question made it clear that he cannot even deliver the soundbite effectively.

Israel

Mr. John Marshall: To ask the President of the Board of Trade if he will make a statement about trade between Britain and Israel. [18689]

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Phillip Oppenheim): I am pleased to report that trade relations between Britain and Israel have never been better.
Bilateral trade last year reached £1.8 billion. United Kingdom visible exports in 1995 were £1.1 billion—almost exactly double the figure five years ago.
In December 1995, the first meeting of the Israel-Britain Business Council was opened in London by my hon. Friend the Minister for Trade and the Israeli Minister of Industry and Trade. The council, established last March by my right hon. Friend the Prime Minister during his visit to Israel, is a new bilateral private sector forum to expand commercial links of all types between Britain and Israel.

Mr. Marshall: Does my hon. Friend agree that trade between Britain and Israel is inevitably linked to the success of the peace process? Does he also agree that the conference of world leaders discussing anti-terrorism in Egypt today will play an important role in the success of the peace process? Will my hon. Friend therefore condemn the failure of the leaders of Syria to attend that conference?

Mr. Oppenheim: We all particularly condemn the extreme cowardice of terrorism against civilians. My right hon. Friend the Prime Minister is today attending the Sharm el-Sheikh conference, which is intended to put the peace process back on track. We can all agree that it is a great shame that Syria, which is a major player in the region, is not at the conference. Trade and peace go hand


in hand, and open and interdependent trading relations make it less likely that countries will go to war. That is why the growing trade relations between Israel and other Arab states are greatly to be welcomed.

Manufacturing Industry

Mr. Atkins: To ask the President of the Board of Trade what representations he has received about manufacturing industry in the north-west of England. [18690]

The Minister for Competition and Consumer Affairs (Mr. John M. Taylor): Other DTI Ministers and I regularly receive representations about manufacturing industry in the north-west. My right hon. Friend the President of the Board of Trade, as he said a moment ago, has discussed issues facing manufacturers with the Consortium of Lancashire Aerospace and, more recently, has received representations on behalf of the automotive sector in the north-west.

Mr. Atkins: Is my hon. Friend aware of the success story that is manufacturing industry in the north-west of England, with large companies such as British Aerospace and Leyland Trucks and smaller companies such as Schwan's Pizzas and Centurion Furniture doing extremely well in South Ribble? Does he agree that the cry must be "Do not let Labour ruin it"?

Mr. Taylor: I would, of course, agree with my right hon. Friend. He has hit the nail on the head and he is right about the success story. The manufacturing sector in the north-west is second only to the south-east in value, and there are some well-deserved success stories. I was not aware of the success of the pizza and furniture companies, but I know about Leyland Trucks and its deal with Isuzu Motors of Japan and about British Aerospace, the Eurofighter and the airbus. That is all very good news for the north-west and it has been supported by inward investment.

Mr. Pike: Will the Minister recognise that aerospace is extremely important to Lancashire? I am glad that he has met the consortium. Will he further recognise that if British Airways insisted on British engines and on using the European airbus, with its British components, that would be a tremendous boost to this country's aerospace industry?

Mr. Taylor: I have never been in favour of compulsory "Buy British" policies, but we ought to look optimistically at the fact that British goods will sell because of British quality.

Mr. Dover: Will the Minister convey to his colleague the Minister for Industry and Energy the grateful thanks of many manufacturing firms in the Chorley and South Ribble area for the efforts made to ensure that Konver European funding will be available to help us get out of defence-related industries and into more peace-related activities?

Mr. Taylor: I understand that my hon. Friend is talking about no less than £84 million. I shall make sure that his message is relayed to my Department and to the north-west Government office.

Sub-Post Offices

Mr. Tyler: To ask the President of the Board of Trade what assessment he has made of the profitability of the sub-post office network. [18691]

Mr. Oppenheim: This is primarily an operational matter for the Post Office. The Post Office Counters network as a whole is profitable and over 95 per cent. of the 19,500 post offices are privately owned and operated sub-post offices which are usually run in conjunction with other retail businesses.

Mr. Tyler: Is the Minister aware of the recent survey in Devon and Cornwall showing that 58 per cent. of sub-postmasters and sub-postmistresses are being forced to consider selling up, chiefly because of the impact of the uniform business rate, which is a Government responsibility? Will he acknowledge that it does not require legislation to extend hardship relief to all village sub-post offices? Will he also acknowledge how important they are to the life of villages, and undertake to make representations to his colleagues in the Department of the Environment, the Welsh Office and the Scottish Office, to bring in legislation as soon as possible, if that proves necessary? In the meantime, the current hardship relief should be extended to village post offices.

Mr. Oppenheim: I have great sympathy with the hon. Gentleman's points. I have not seen the survey to which he refers, however. We are committed to maintaining a nationwide network of post offices, particularly in rural areas where, as we all recognise, they are very important. We are trying to help sub-post offices, first by introducing new technology—especially the automation project, which is expected to go on stream early next year. We are also allowing Post Office Counters to sell new products, which should help, and we are allowing the Post Office more commercial freedom.
In rural areas there can be problems when sub-postmasters and sub-postmistresses retire—it is sometimes difficult to fill their places. I know that there have been three closures in the hon. Gentleman's constituency, but I understand that two of those sub-post offices have subsequently reopened.
I accept that there is concern about the business rate. I understand that my right hon. Friend the Prime Minister recently said that he would look at it again. In any case, I shall certainly look carefully at the document that the hon. Gentleman mentioned if he will send it to me.

Mr. Waller: Will my hon. Friend confirm that information technology and the installation of terminals in sub-post offices will provide the latter with great new opportunities and help to secure their position in the many communities in which they play such an important role?

Mr. Oppenheim: My hon. Friend is absolutely right. We are pushing forward the automation project as rapidly as possible. I am pleased to say that we hope that the first terminals will be installed at the beginning of next year; others will then rapidly be installed over the course of 1997.

Dr. Howells: Why has there been such a delay in the installation of new equipment in the 20,000 sub-post offices? Why has the cost of administering the private finance initiative to pay for this work mounted so rapidly? The public sector team allocated to the project has grown to at least 100 officials, and bidding costs alone will amount to £40 million—several times the cost of a traditional procurement.

Mr. Oppenheim: With respect, I am not sure that the hon. Gentleman has got his facts exactly right. This is a very large project which involves linking in Departments such as the Department of Social Security. It is important for that Department's recipients that we get the technology right. We are determined to ensure that when it goes in, it works properly. That is better than rushing it, with the result that some social security recipients might end up with problems. It is an enormous project. Automation equipment will be installed in almost 20,000 sub-post offices and post offices. As far as I am aware, the project is unique in the western world. I do not think that any other country is pushing forward automation as radically as we are. It is important that we get it right, and I am confident that the first terminals will come on stream next year.

Mr. Harris: I accept that there is a real problem with the uniform business rate, but does my hon. Friend agree that the incomes of many rural post offices and sub-post offices have been boosted considerably by the national lottery, and does he have any figures on that?

Mr. Oppenheim: I do not have any figures to hand, but my hon. Friend is right. The incomes of sub-post offices have been boosted by the national lottery, and the range of new products that we are allowing Post Office Counters to sell will particularly help to maintain the rural network.
Overall, there are some 19,500 post offices, and the number has changed little over the past six years. We are absolutely committed to ensuring that the post office network is maintained, because we recognise how important it is to rural areas.

Merchant Shipbuilding

Dr. Godman: To ask the President of the Board of Trade what is the approximate number of men and women currently employed in (a) merchant shipbuilding yards and (b) oil and gas fabrication yards; and what were the equivalent figures in 1987. [18694]

The Minister for Small Business, Industry and Energy (Mr. Richard Page): On the latest available figures—for 1993–39,900 men and 3,800 women were employed in shipbuilding, ship repair and boatbuilding, compared with 53,000 men and 4,400 women in 1987. Comparable figures between the two years for shipbuilding alone are not available.
Statistics are not collected for oil and gas fabrication yards on their own, but the Offshore Contractors Association estimates that up to 10,000 men and women are employed by such yards.

Dr. Godman: Is the Minister in a position to estimate how many of those employees are apprentices? In the distant past when I was an apprentice shipwright, the employment ratio was one apprentice for every six tradesmen. What is the Minister's Department doing to ensure that those skills are maintained by a healthy number of apprenticeships being served by young men and women, or is it standing idly by and allowing those skills to run down?

Mr. Page: The hon. Gentleman and I can claim some brotherhood on this matter because I also served an industrial apprenticeship. I am fully aware of the value of an apprentice education and of its value to the nation. I must point out, however, that this is a matter for the Department for Education and Employment, with which we are in communication. We want more modern apprenticeships to give that core technology and skills base and to move it forward. At the moment, I cannot give the hon. Gentleman the figures, but I can tell him that in the period about which he asked, although the number of employees decreased, efficiency in British yards increased from some 247,000 tonnes to some 288,000 tonnes, so there has been an improvement.

Mr. Batiste: Although all of us would like more young people to obtain relevant industrial qualifications, what assessment has my hon. Friend made of the impact of the minimum wage on the recruitment and training of young people? Such a policy, as advocated by the Labour party, would be disastrous for the employment and qualification prospects of our young people.

Mr. Page: My hon. Friend makes a valuable point. Companies are locating and investing in this country because we have the right environment and economic background in which they can develop and grow. There is no doubt whatever that a minimum wage would be disastrous for employment prospects. It is not a coincidence that unemployment is falling in the United Kingdom but rising in the European Union, where there are such restrictions. One question that I should like to ask the Labour party is: what will be the minimum wage?[Interruption.]

Madam Speaker: Order. I think that the Minister was answering the hon. Member for Elmet (Mr. Batiste).

Rev. Martin Smyth: Does the Minister share my concern that fewer merchant ships are flying the British flag and that a significant number of them are no longer crewed by British merchant sailors? Will he welcome the fact, as revealed in a recent periodical, that Belfast is poised to become the Aberdeen of the next decade because of its role in oil and gas exploration?

Mr. Page: The hon. Gentleman has given me a very good lead-in, enabling me to pay tribute to the recent successes of Harland and Wolff. I hope that those successes increase, and provide many jobs in Northern Ireland. As for the question of flagging out, that is indeed up to the individual companies involved; it is not a matter for the British Government.

Mr. Ian Bruce: Has my hon. Friend any idea of the number of new orders that have been won by British shipyards for merchant vessels, and the number of jobs involved? Has he taken action against our European partners and others in regard to the provision of state aids that have been featherbedding their shipbuilders rather than allowing the productivity of the British worker to win new orders?

Mr. Page: There is an agreement by the Organisation for Economic Co-operation and Development to abolish any direct support schemes, which should come into effect on 15 July, assuming that Japan and the United States ratify it. If they do not, the Government and the European Union will have to re-examine the position.
There is no doubt that there is overcapacity in the world and very hard pressure on prices, but British shipping is doing quite well. In contrast, in Bremen Vulkan in Germany some 23,000 people are threatened with some form of bankruptcy, and hence with unemployment. Here in the United Kingdom, good news is coming through from Swan Hunter; Appledore continues to maintain a full order book; Kvaerner Govan has a contract worth some £61.5 million to build a vessel to support the launch of a western communications satellite by Ukrainian rockets from a sea platform—it should be exciting when that starts—and Ferguson Shipbuilders, in the hon. Gentleman's constituency, has recently won an order worth some £19.3 million to build a fisheries research vessel for the Scottish Office. There is quite good news for British shipping at the moment.

Domestic Gas Supplies

Mr. Home Robertson: To ask the President of the Board of Trade if he will discuss with the Office of Gas Supply measures to improve the security of gas supplies to domestic consumers. [18695]

Mr. Page: I was sorry to hear of the supply failure that affected part of the hon. Gentleman's constituency during the exceptionally severe weather last December. The stringent security standards set out in the gas licences are appropriate to ensure that such events are rare.

Mr. Home Robertson: The Minister knows that 5,000 households in my constituency had their gas supplies cut off during the Arctic weather at the end of December, with dire consequences. We still await the Ofgas report. Is the Minister aware that the compensation paid by British Gas is derisory, and that the excuses offered by TransCo—that it was very cold, and that consumers were using too much gas—are laughable? Does he accept that gas consumers have a right to expect secure gas supplies in cold weather, and that effective and binding contractual conditions must be imposed on this wholly profitable privatised utility?

Mr. Page: I accept what the hon. Gentleman says. He has been a doughty battler on behalf of his constituents. I must point out, however, that public gas transporters are required to design their systems to meet peak demands that are likely to occur once in 20 years, and that the demands in late December were likely to occur once in 80 years.
Having said that, let me add that British Gas TransCo has offered those who were disconnected compensation of some £20 per day of disconnection. Moreover, I understand that it plans to reinforce the local system as part of an on-going work programme—some 1.25 km is involved—to ensure that the situation does not occur again.

Mr. John Greenway: Does my hon. Friend agree that, notwithstanding the difficulty encountered by the hon. Member for East Lothian (Mr. Home Robertson) in his constituency, gas supplies generally are much more secure than electricity supplies, which are more likely to be disrupted by the kind of weather that we have seen over the past few months? Is that not the reason why more and more people would like their homes to be connected to gas, and will he ensure that British Gas continues to take every opportunity to ensure that it is available in rural areas where it is not currently available?

Mr. Page: I can only say to my hon. Friend that the answer must be yes, we must try to ensure that the gas network expands. One of the reasons why people wish to connect to gas is that in real terms gas prices are down by some 23 per cent., excluding VAT, to domestic users and by some 46 per cent. to industry. When the south-west becomes open to free and open competition, prices to the domestic consumer will decrease by a further 15 to 20 per cent., so it is no wonder that people want to sign up for gas.

Mr. Nigel Griffiths: Will the Minister investigate the Gas Consumers Council's complaints that elderly people have been left without heating because the gas company puts a 30-minute limit on the time that it allows for fault repairs? What kind of Government would introduce legislation such as the Gas Act 1995 which permits a company to act in such an indefensible way?

Mr. Page: Once again, the hon. Gentleman is saying things that are not completely accurate. It is nothing to do with the Gas Act. When there was a disconnection in the constituency of the hon. Member for East Lothian (Mr. Home Robertson), British Gas provided heaters for people who were most vulnerable.

Manufactured Exports

Mr. Dunn: To ask the President of the Board of Trade what was the value of exported manufactured goods for the year 1994–95; and if he will make a statement. [18696]

Mr. Lang: In 1995, the value of exported manufactured goods was £127.5 billion, a substantial increase over the figure for 1994.

Mr. Dunn: In congratulating all the people in industry who are responsible for such an outstanding result, does my right hon. Friend the President of the Board of Trade agree that nothing could be more destructive of the United Kingdom's export success than the introduction of the social chapter and of the minimum wage, and the implementation of some of the European Court's dafter decisions?

Mr. Lang: My hon. Friend is absolutely right. The improved productivity of manufacturing industry has been the secret of so much of our success and of the growth in employment, output and exports in that sector. That productivity growth of 80 per cent. since the Government came to office would be severely undermined if we accepted either the social chapter or a national minimum wage.

Mrs. Clwyd: Does the calculation of value include possible losses under the export credits guarantee system? The President of the Board of Trade will recall that his Department lost £652 million of taxpayers' money in exporting so-called non-lethal equipment to Iraq—or has he refined his policies since then?

Mr. Lang: According to my recollection, the hon. Lady's figures in relation to defence equipment are wrong by a substantial margin, but I will of course check them. I hope that she realises that the purpose of the Export Credits Guarantee Department is to provide the insurance cover that our exporters need. It is matched by comparable schemes in other countries. Without it, it would be impossible for many companies to break into export markets and to achieve those remarkable and record export figures.

Mr. Sykes: Following my hon. Friend the Member for Dartford (Mr. Dunn), is my right hon. Friend aware that the French Government recently had to export a large contract to Pindars in my constituency of Scarborough because French companies cannot compete with companies in Britain? Is that not because we do not have the social chapter, the minimum wage and the 48-hour week?

Mr. Lang: My hon. Friend is absolutely right. He will welcome, as I do, the fact that since 1981 the United Kingdom's volume of exports has risen faster than that of Germany, Italy or France, to which he refers.

Mrs. Beckett: Why does the Secretary of State agree with his hon. Friends when he must be aware that despite exporting success, which we all welcome, the level of imports of manufactured goods into this country is even higher and we have a net deficit of £8 billion? Many of the countries which export more successfully to us than we do to them are signatories of the social chapter and have national minimum wage type provision. Manufacturers argue that that substantial net deficit is due to the fact that we have too few world-class manufacturing companies, too few skilled workers for them to hire, and too little research and development and long-term investment. Why do Ministers not listen for once to manufacturers and to Labour Members and introduce the measures, such as investment allowances, that they urge on the Government to help solve those problems?

Mr. Lang: We do not need lessons in this matter from the Labour party. From 1974 to 1979, the Labour Government's last period of office, we had the slowest growth in manufacturing productivity and the slowest growth in output of any country in the European Union. Through the period of office of this Government, there has been the highest growth in both productivity and

output of any country in the EU. As the right hon. Lady will have seen from figures published recently, we now have a visible trade surplus with the EU.

Shipbuilding

Mr. Hutton: To ask the President of the Board of Trade if he will make a statement about the future prospects for the shipbuilding industry. [18697]

Mr. Page: I am pleased that United Kingdom shipyards are continuing to improve their competitiveness and win orders in the face of very difficult international market conditions.

Mr. Hutton: What action will the Government be taking to ensure that British shipbuilders, such as VSEL in my constituency, will not be disadvantaged by hidden or indirect subsidies paid by foreign Governments to their shipbuilding industries? Will the hon. Gentleman join me in congratulating VSEL on recently winning two new orders to build merchant ships in the United Kingdom?

Mr. Page: As I said earlier, there is an OECD agreement to abolish direct support schemes. It will come into force on 15 July, assuming that Japan and the United States both ratify it. If the hon. Gentleman or any company has any evidence of unfair subsidies, the DTI would be only too eager to investigate those allegations. The order for two merchant vessels is a tribute to VSEL. It shows that, subsidy or not, that company has not been prevented from gaining orders.

Sir Donald Thompson: When considering shipbuilding. will my hon. Friend ensure that he does not forget the large boat and yacht building industry in the United Kingdom, the products of which employ many thousands of British men and women throughout the world?

Mr. Page: My hon. Friend makes a valid point. When UK yards concentrate on vessels for ownership and use in north-west Europe, where they do not face competition from Japanese and Korean yards, they do extremely well. The boat building industry is a valuable contributor to the UK economy.

Foundry Industry

Mr. Canavan: To ask the President of the Board of Trade if he will arrange to meet representatives of the foundry industry to discuss prospects for the industry. [18698]

Mr. Page: The President has no plans to meet representatives of the foundry industry. My right hon. Friend the Minister for Industry and Energy met representatives from the foundry industry on 16 November 1995.

Mr. Canavan: Bearing it in mind that the British foundry industry employs 52,000 people, is the Minister aware of the concern about a crippling burden on the industry if the higher rate of landfill tax is imposed? In view of the recycling nature of the industry and the fact that most of its waste consists of inert sand and slag, may


we have an absolute assurance that the industry will be charged the lower rather than the higher rate of landfill tax?

Mr. Page: All that I can say to the hon. Gentleman at this stage is that the matter is out for consultation. It is with Customs and Excise at present and I know that the foundry industry is heavily involved in those discussions.
I thank the hon. Gentleman for raising the whole question of the foundry industry. I pay tribute to the DTI's Foundry 2000 initiative. For the first time in three decades the decline in the number of tonnes produced has been halted and production is on the way up again. It is forecast that by the year 2000 production will be 1.45 million tonnes, which is a considerable improvement in the right direction.

Scott Report

Mr. Dalyell: To ask the President of the Board of Trade, pursuant to paragraph D4.42 of Lord Justice Scott's report, if a fear of strong public opposition was a factor in determining the nature of the answer to the hon. Member for Linlithgow concerning al-Hillal deemed by Sir Richard Scott to be a deliberate failure to inform Parliament. [18700]

Mr. Lang: No.

Mr. Dalyell: As a former Secretary of State for Scotland, the right hon. Gentleman will have as little stomach as I have for indulging in Question Time today, in the light of Dunblane.
With regard to al-Hillal, why was the House of Commons deceived? That is what Lord Justice Scott said. If the specific questions that I tabled on al-Hillal had been answered truthfully, would not the whole course of events in the arms-to-Iraq saga have been different? Should there not have been a truthful answer to a proper parliamentary question?

Mr. Lang: It remains the Government's clear and very firm view that the House of Commons was not deceived. I recognise that Sir Richard Scott concluded that some of the information given to the House, whether in parliamentary answers or in correspondence, was inaccurate, but he also acknowledged the good faith and sincerity with which those views were advanced by my right hon. and hon. Friends. It is quite clear that they did not knowingly mislead the House. It remains my view, and that of my right hon. and hon. Friends, that the House was not knowingly misled.

Manufacturing Industry

Mr. Nicholas Winterton: To ask the President of the Board of Trade what are his policies for the promotion of British manufacturing industry. [18701]

Mr. Oppenheim: The Government attach high priority to manufacturing as an important and growing sector of our economy. There has been an enormous improvement in our manufacturing performance, which will be

sustained and built on if we maintain sound monetary policy and low interest rates, and refuse to burden industry with a minimum wage and the social chapter.

Mr. Winterton: Now that the Confederation of British Industry has sidelined yet again its support for manufacturing industry, thus justifying my establishing the all-party manufacturing and construction industries alliance, may I urge the Government to redouble their efforts, as they are doing in the textile industry, to encourage import substitution by identifying goods in which we have a trade deficit, and liaise with industry in bringing forward proposals to encourage British suppliers to compete for orders which otherwise—sadly—will go overseas?

Mr. Oppenheim: My hon. Friend is right to emphasise the importance of manufacturing to the British economy. The best way to improve business prospects and manufacturing in Britain is to carry on running the economy sensibly with a sensible monetary and fiscal policy, to ensure that taxes are not too high and to try to improve the education system—often in the teeth of opposition from Labour local education authorities.
Many important high-tech sectors of British manufacturing have done very well over the past 16 years. In pharmaceuticals, for example, we have moved from being the third largest exporter to being the largest exporter, having overtaken Switzerland and the United States. Our aerospace industry has also done extremely well, especially in very high-tech aero engines, in which Rolls-Royce has increased its share of the civil air engine market from 10 per cent. to 30 per cent. In many high-tech sectors, Britain has done very well and it is very important that we continue with that progress. I am not sure that an interventionist sector-by-sector approach is necessarily the best way to take that forward, but I agree with my hon. Friend's underlying point.

Mr. Sheerman: Will the Minister encourage his colleagues to stop gloating when the German, French or Spanish economies get into any trouble and remember that they are our major customers for manufacturing products and that when they start getting into trouble, it is not long before we follow them into recession? Will he remember that the lead element needed to reactivate British manufacturing is top-quality managers? Are the actions of the Chancellor of the Exchequer and the Secretary of State for Education and Employment encouraging that development by cutting university education, university postgraduate education and business schools? Is that the right way to tackle our manufacturing dilemmas?

Mr. Oppenheim: I agree with the hon. Gentleman about the importance of education to the overall competitiveness of the economy. However, I should point out that the number of people aged 16 and over in higher and further education has trebled under the Government. The hon. Gentleman should pay tribute to the progress that we have made. A recent survey showed that in the late 1970s the competitiveness and productivity gap between Britain and Germany widened. That gap has narrowed by 75 per cent. since 1979 and it is a tribute to


the progress that we have made in making British manufacturing more productive and competitive since that time.

Mrs. Roche: Let us keep talking about 1979, because since then investment in manufacturing has fallen by 10 per cent. in real terms. Does that not explain why some small businesses in that sector are so disillusioned with the Government, who have totally failed to make this country the enterprise centre of Europe, as claimed by the Prime Minister?

Mr. Oppenheim: I am delighted to concentrate on 1979, because I remember that manufacturing output fell under the Labour Government, whereas it has grown sharply under the Conservative Government. Not only that, but business investment and manufacturing productivity have risen at twice the rate they did under the Labour Government.

Domestic Gas Supplies

Mr. Luff: To ask the President of the Board of Trade when he plans to extend competition in the supply of gas for domestic consumers to Worcestershire. [18702]

Mr. Eggar: Domestic gas consumers in Worcestershire will be able to benefit from competition in the supply of gas from a date to be determined in 1998. Experience in the first phase of competition in the south-west suggests that consumers may be offered average savings of 15 to 20 per cent. on their gas bills—and more in some cases.

Mr. Luff: Does my right hon. Friend understand that of all the policies that he pursued during the three years during which I had the privilege to be his parliamentary private secretary—[HON. MEMBERS: "Give him a job."]—probably none will bring greater benefit to ordinary consumers than competition in the supply of domestic gas? For precisely the reason set out in my right hon. Friend's answer—the sharp reduction in prices that competition will bring consumers in the trial area—does he understand my enthusiasm to ensure that my constituents have that benefit at the earliest possible date?

Mr. Eggar: I thank my hon.—and close—Friend for his opening comment. I assure him that I am doing my best to live up to the standards that he set. There is no doubt that domestic consumers will benefit immensely from the Gas Act 1995. The information that we have already received from the south-west trial area shows not only that consumers of average quantities of gas will benefit, but that low-quantity consumers will benefit, too. At least two of the competitors have offered consumers tariffs involving no standing charge, thereby exposing as a fraud the constant accusation from the Opposition Front Bench that gas competition will benefit only averagely-off consumers and not low-volume and therefore often lower-income consumers.

Mr. Foulkes: rose—

Madam Speaker: The substantive question relates to Worcestershire only.

Mr. Foulkes: Thank you, Madam Speaker. Can the Minister say whether gas consumers in Worcestershire, in the south-west of England—[HON. MEMBERS: "Where?"]—in the west country—[HON. MEMBERS: "No."]—in the west midlands, not far from your constituency, Madam Speaker, if they get competition in gas supply, will be any luckier than a constituent of mine in Coylton, who on 6 December ordered a—

Madam Speaker: Order. That was a good try, but it is out of order. I call Ms Jean Corston, who I am sure will do a lot better.

British Gas (Executive Salaries)

Ms Corston: To ask the President of the Board of Trade what representations he has received from the south-west office of the Gas Consumers Council about the salary provision of the chairman and chief executive of British Gas. [18703]

Mr. John M. Taylor: I have received no such representations.

Ms Corston: The chairman of British Gas has just retired on £250,000 a year, with a pension package worth £3 million, while complaints against British Gas in the south-west region doubled to 3,000 last year. Does the Minister think that the decision to axe 25,000 skilled jobs in the gas industry has contributed to the soaring number of complaints? Why does boardroom pay continue to go through the roof while people are expected to put up with poorer service?

Mr. Taylor: First, the chairman of British Gas has not retired. Secondly, why does the hon. Lady not consider instead the best interests of consumers in her constituency? We believe that competition is the consumer's best friend, and it is about to commence in her area, with a pilot scheme starting on 29 April. That is eagerly awaited by consumers, who stand to gain considerably from it.

Sir Michael Grylls: Is my hon. Friend aware that my constituents in Surrey would very much like the opportunity to choose an alternative supplier for their gas and would welcome competition? Will he and his colleagues in the Government do all that they can to bring about and spread competition as quickly as possible?

Mr. Taylor: So far as I am concerned, we cannot spread competition fast enough. However, we need to complete the pilot in the south-west which begins on 29 April, and learn the lessons from it with all speed so that the advantages can be spread to my hon. Friend's constituents as well.

Trade Balance"

Mr. McAvoy: To ask the President of the Board of Trade what measures he is taking to improve the visible trade balance in the forthcoming 12 months. [18705]

Mr. Oppenheim: Through Overseas Trade Services, the DTI provides the best ever package of information, advice and practical assistance to all British companies wishing to explore new export opportunities.

Mr. McAvoy: That entirely complacent answer from the Minister totally ignores the ever-widening deficit. Is the Minister aware that 1995 was the 13th successive year that the United Kingdom had an annual world visible trade deficit? Whereas we welcome proper measures to reduce that deficit, is not the Government's record appalling and is not the best and only way to improve the country's economic performance for the present Government to go?

Mr. Oppenheim: The hon. Gentleman will not expect me to agree with his last comment, although I agree with him about the importance of the trade balance of the manufacturing sector. I remind him that in the 1960s and 1970s our trading position deteriorated steadily under Governments of both colours, but since the mid-1980s we have maintained our share of world trade for the first time in many decades and exports of manufactured goods have increased at twice the rate they did under the last Labour Government.

Mr. Garnier: Does my hon. Friend agree that one of the best ways to improve the visible trade balance is to continue the Government's strong economic policies, to discourage the imposition of a minimum wage and to discourage the introduction of the social chapter?

Mr. Oppenheim: I agree with my hon. and learned Friend. The best way to empower workers and increase their bargaining power at the workplace is not by intervening artificially in wage contracts, but by ensuring that workers have a good education and good training so that they are valuable and productive to their employers. It is fundamentally dishonest for the Opposition to pretend to British workers that there is an easy, painless way to increase wages without a commensurate increase in productivity. Come the general election, people will be asking members of the Labour party at what level they intend to set the minimum wage; unless they can answer that question, no one will take that key Labour policy seriously.

Export Contracts (Language Barriers)

Mr. Rendel: To ask the President of the Board of Trade what assessment he has made of the proportion of British export contracts lost because of communication difficulties caused by language barriers in the most recent year for which information is available. [18707]

Mr. Oppenheim: A survey of UK companies carried out in 1995 as part of the DTI's national languages for export campaign showed that 25 per cent. of exporting companies had lost trade due to language barriers.

Mr. Rendel: Given that that must mean a considerable loss of export revenues, what does the Minister plan by way of incentives to British companies to ensure that they train their employees more effectively in languages?

Mr. Oppenheim: Uncharacteristically, I agree with that great German socialist Willy Brandt about that. He was a socialist in the days when socialists really were socialists and one knew where they stood. He said—I hope that the House will excuse my accent:
If I am selling to you, I speak your language; if I am buying, dann müssen Sie deutsch sprechen.

I agree with those sentiments, and I will send the hon. Gentleman a list of the incentives and initiatives that the DTI is taking forward in that direction.

Mr. Viggers: Does my hon. Friend agree that it is easy for us to become complacent because English is the language of international trade? There is a remarkable disparity, for instance, in the number of Japanese learning English and the number of English learning Japanese. Will my hon. Friend encourage English people to study Japanese?

Mr. Oppenheim: I agree with my hon. Friend. People sometimes go too far in taking advantage of the fact that English is the lingua franca—to coin a mis-phrase—and become complacent. As a result, it can be a disadvantage rather than an advantage. It is important that British exporters should take the trouble to learn the languages of their customers, and I am pleased to say that the number of Japanese language courses in British schools and universities has increased dramatically in recent years.

Mr. MacShane: An earlier German Chancellor, Otto von Bismarck—who spoke Russian, French and English—said that learning foreign languages was a matter for head waiters. He was quite wrong, of course, and German business men speak very good English. As we have Trade and Industry Ministers on the Government Front Bench who are barely capable of speaking English, perhaps I should ask the Minister whether he could conduct this Question Time in a foreign language. If he cannot, will he go and learn one after he loses his seat in the next general election?

Mr. Oppenheim: I know from my various experiences with the hon. Gentleman on the ski slopes that he is an expert linguist and fluent in French, German and, I think, Spanish, which might qualify him for a job as a mâitre d'. When he gets that job, perhaps he will produce a menu with prices rather than a menu without prices, which characterises Labour's minimum wage policy.

Nuclear Electricity

Mr. Gordon Prentice: To ask the President of the Board of Trade what is the current timetable for nuclear privatisation. [18708]

Mr. Eggar: Privatisation of the nuclear power generation industry is expected in the summer.

Mr. Prentice: Why was there no mention of nuclear privatisation in the 1992 Conservative manifesto but only a reference to a review of it? Is it not a deceit and a deception of the British public for £2.5 billion of assets to be handed over—perhaps to the dodgy American company, Duke Power, whose safety record has been absolutely deplorable?

Mr. Eggar: There was a reference in the manifesto to a review, and it was carried out. It concluded that we should move forward to privatise the nuclear industry. As for the outrageous comments towards the end of the hon. Gentleman's question, there are few things that I despise more than people who bring safety fears into the Chamber of this House.

Metrication

Dr. Wright: To ask the President of the Board of Trade what assessment he has made of the effects on business and consumers of the recent metrication of weights and measures. [18711]

Mr. John M. Taylor: My Department carefully assessed the costs to business of complying with the latest metrication changes. Between 1988 and 1993, we consulted business organisations, consumer groups and others, who generally supported further metrication because of the very real savings and other benefits that this would bring. The latest changes are part of a process started by the Labour Government in 1965.

Dr. Wright: Has not metrication of weights and measures produced a great increase in burdens on business and confusion for consumers? Is it not even more disgraceful that the over-regulation of an EU directive by the previous deregulation Minister—the former President of the Board of Trade, now the Deputy Prime Minister—was responsible for this measure in the first place? Is it not an outrage that we have the measure, an outrage that it was introduced without discussion in Parliament and a further outrage that it was introduced by the deregulator-in-chief?

Mr. Taylor: That is quite a lot of outrage for one afternoon. The fact is that it is extremely important for British trade to sell in metric units throughout the world. The hon. Gentleman would not make much headway if he tried to sell in quarts, for example, in Italy. The British people and British consumers wanted metrication. Consumers seem to be taking it in their stride, and I am not aware of a single criminal prosecution being brought by a trading standards department.

Manufacturing Industry

Mr. Roy Hughes: To ask the President of the Board of Trade what new measures he is taking to promote investment by British companies in domestic manufacturing industry. [18714]

Mr. Oppenheim: Low inflation, low tax rates, low interest rates and sound public finances are the best stimuli to investment. Manufacturing investment rose by

more than 6 per cent. in 1994 and 1995, and the Confederation of British Industry expects a further increase of 9 per cent. this year.

Mr. Hughes: Has the Minister noticed that our major companies are investing heavily overseas but are tending to neglect the domestic market? I do not know whether incentives are necessary, but we certainly need to invest in the domestic market to increase efficiency and to create new jobs.

Mr. Oppenheim: I very much agree with the hon. Gentleman about the importance of investment. He will no doubt be pleased to know that investment rose quite sharply last year and is forecast to do the same this year. It is rising at the fastest rate since 1988. We are an international economy, and it right in an open, global market that British companies should invest at home as well as abroad.

Conferences and Meetings

Mr. David Atkinson: To ask the President of the Board of Trade what is his estimate of the United Kingdom's share of the international conference and meetings industry. [18717]

Mr. Page: The British Tourist Authority estimates that 490,000 visitors came to the United Kingdom for conferences and meetings in 1994. My Department has no estimate of the share that that figure represents of the international conference and meetings industry.

Mr. Atkinson: Does my hon. Friend agree that in that intensely and fiercely competitive world industry, this country does well, including the Bournemouth international conference centre in my constituency? What effect does he think that a 48-hour working rule and a national minimum wage would have on the competitiveness of our industry and its ability to compete successfully with the rest of the world?

Mr. Page: My hon. Friend makes a point that has been mentioned once or twice already this afternoon. The British Tourist Authority estimates that £285 million is currently spent by overseas delegates, an average of £582 per delegate. There is absolutely no doubt that the restrictions of the social contract and a minimum wage would inhibit our ability to offer conference facilities and ensure that people would not be so willing to come to the United Kingdom.

Point of Order

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): On a point of order, Madam Speaker. Members will have heard with horror of what occurred in Dunblane this morning in an appalling incident that has left 16 young children and a teacher dead and many others injured. I know that the whole House would wish me to express not only our horror but our heartfelt sympathy to the families of those killed or injured and to everyone else in what is this afternoon a shocked and grieving community. That shock and grief will be shared throughout the country.
My right hon. Friend the Secretary of State for Scotland, who is also the constituency Member, has gone to Dunblane with the hon. Member for Hamilton (Mr. Robertson), who lives there and whose children attended the school where this terrible tragedy took place.
We shall arrange for a full statement to be made to the House tomorrow. I should also tell the House that following discussions in the usual channels it has been agreed that it would not be appropriate to proceed with the meeting of the Scottish Grand Committee which was due to take place in Glasgow on Friday.

Mrs. Ann Taylor: The whole House will want to be associated with the comments of the right hon. Gentleman. May I say on behalf of the Opposition that every one of us is deeply shocked by the events at Dunblane this morning? Our genuine and heartfelt sympathy goes out to everyone who has been affected. Our first thoughts are naturally for the parents and families of the young children who have been murdered and the family of the teacher, for those who have been injured and also for all of those at the school and in the local community who have been traumatised by the events this morning.
It is a bewildering tragedy and it is entirely right that the Leader of the House should indicate that a statement will be made to the House when more of the facts are known.
Today, we in the House are united in our feelings of absolute horror at what has happened. Hon. Members, many of us parents, share the grief of those whose lives have been devastated by events in Dunblane.

Mr. Archy Kirkwood: May I associate my right hon. and hon. Friends with the expressions of grief and sympathy that have been expressed by the Leader of the House to the bereaved parents, families and friends? May I also commend the Government on taking the decision quickly to cancel the meeting proposed for the Scottish Grand Committee on Friday? That was the appropriate thing to do.
Violating the sanctity of a primary 1 classroom heightens the horror of the event and prompts the question: is there really nowhere that is sacrosanct? Even a closely knit community like Dunblane will have to dig deep into its reserves of human capital to recover from that incomprehensible attack. All our thoughts are with it this afternoon.

Mr. Alex Salmond: May I associate myself with those sentiments and express my party's sympathy to the bereaved over an incident that defies belief and description? I support the decision to cancel the meeting of the Grand Committee as a mark of respect. I do not think that there is much appetite in Scotland right now for political debate, nor will people want to draw lessons too quickly—until we know all the facts. One thing is certain. Most of us in Scotland know the community involved well. All Scotland will show that community sympathy, support and solidarity in the next few days.

Madam Speaker: I am most grateful to the House. I think that we should now move on until we get a statement tomorrow.

NORTHERN IRELAND GRAND COMMITTEE

Motion made, and Question put forthwith, pursuant to Standing Order No. 90(2) (Northern Ireland Grand Committee),

That the Matter of the proposal for the draft Regional Strategy for health and social well-being 1997–2002, being a Matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Grand Committee for its consideration.—[Dr. Liam Fox.]

Question agreed to.

Hostage Recovery

Mr. Neil Gerrard: I beg to move,
That leave be given to bring in a Bill to place a duty on the Secretary of State to ensure that appropriate assistance is provided to people returning to the United Kingdom, having been held against their will as hostages, and to their families; and for connected purposes.
The purpose of my Bill is simple and straightforward: to put a duty on the Government to ensure that people who have been held as hostages abroad get support, assistance and advice from the Government when they are released. The public think that few people have been held as hostages and remember that when Terry Waite and John McCarthy—two well-known cases—returned, they were taken to RAF Lyneham and given assistance. People assume that that is the natural course of events and that it occurs in every case.
The reality is rather different. In recent years, a significant number of people have been held hostage. More than 1,200 people were held in the Gulf during the Gulf war and smaller numbers have been held in several other places since, including the two men who are being held in Kashmir. Although we may like to think that hostage taking will cease, I suspect that it will not. It has gone on for the whole of recorded history and will happen again somewhere, at some time. None us can predict where or how many people will be involved.
It is obvious that what happens to people when they are held is deeply traumatic and stressful. I do not want to speculate on cases with which I have not been personally involved, but I am sure that it is safe to say that Keith Mangan and Paul Wells, who are being held in Kashmir, will have been through some dreadful experiences and will need support and help when they are released, which I hope will be soon. In many cases, people who have been released have not had the help that they should have had.
I became involved in the issue through the case of my constituent Paul Ride. He was taken over the border between Kuwait and Iraq by an Iraqi patrol and given a seven-year sentence, supposedly for illegally entering Iraq. At the same time, a constituent of my hon. Friend the Member for Halifax (Mrs. Mahon) was held, together with several other people of various nationalities.
I think that people will be shocked to learn what happened to those men when they were released. Paul Ride was given a taxi home from Heathrow airport and that was the end of direct assistance to him. Nothing else was done to help him. Over the next year or two, he suffered family breakdown and psychiatric problems that led to him attempting suicide by setting fire to his house. The Crown Prosecution Service responded by charging him with arson. It was only after a year of waiting for the case to come to trial that it was dropped and he got the help that he needed.
Finally, I got in touch with Terry Waite, who was able, in turn, to put us in touch with Dr. Gordon Turnbull, who had done the work for the Government when Terry Waite and John McCarthy were released.
That case is not unique. Anyone who is in touch with the Gulf war human shield victims will know that many continue to suffer serious problems four or five years later. The Government are well aware of that fact. They funded research conducted by Dr. Stuart Turner which

concluded that psychiatric problems should be resolved. He found that social and financial problems might lead to psychological problems and, finally—and most importantly in the context of my Bill—he proposed co-ordinated planning in advance in order to deal with possible psychological and social problems.
When the money was provided to Dr. Turner's clinic, the Prime Minister commented in a Department of Health press release about the effect of disasters and traumatic stress on people and the severe and long-lasting problems that could result. His sentiments were echoed by the then Under-Secretary of State for Health, the present Secretary of State for Health. I do not think that anyone doubts that action is necessary. The problem is that it does not occur: people fall through the gaps between the various agencies that might be expected to provide assistance.
My Bill sets out to rectify the problem. Obviously, I accept that there are some difficulties in defining exactly who might be regarded as a "hostage". In some cases, it is very clear that people have been held illegally. In the cases of Paul Ride and Michael Wainwright, the Government helped to arrange for family members to meet the United Nations Secretary-General and ensured that they did not face legal costs in Iraq. Such action is not taken when someone has been charged with a genuine criminal offence.
I accept that we must help all people who have been incarcerated in foreign prisons, but I think that those who have been held hostage have special needs. Those needs may vary from case to case—whether it is psychiatric counselling or direct practical assistance such as temporary housing, social services assistance and so on. Someone must be responsible for ensuring that that assistance is co-ordinated and that people know where it may be obtained. We are talking about people who have been through deeply traumatising and stressful experiences: they are not in the best position to make decisions about how to help themselves or to know where they might receive assistance.
I do not ask the Government to spend vast amounts of money or to set up permanent quangos or bureaucracies that might do little for long periods. The Government established a special unit in the Foreign Office during the Gulf war, but it was concerned simply with helping to achieve the release of those who were being held as part of the human shield. No organised assistance was provided to follow up those activities. The Government also funded Dr. Stuart Turner's clinic, thereby acknowledging that a need exists.
In the past year or 18 months I have talked to those who have been held as hostages, to doctors who have been involved in treating returned hostages and to members of the Gulf support group. I have received direct support in my endeavours from both Terry Waite and John McCarthy, who believe that we must ensure that other people receive the same assistance as they did.
I simply ask the Government to accept their responsibility—their duty—to British citizens who have suffered for political reasons, who have been in the wrong place at the wrong time. That aim could be achieved without legislation, but legislation would mean that the duty exists and that something will be done.

Question put and agreed to.

Bill ordered to be brought in by Mr. Neil Gerrard, Mrs. Ann Clwyd, Ms Ann Coffey, Mr. Barry Field, Mr. Bruce George, Mr. John Gunnell, Mrs. Alice Mahon, Mr. Jim Marshall, Miss Emma Nicholson, Sir Nicholas Scott and Mr. Alan Simpson.

HOSTAGE RECOVERY

Mr. Neil Gerrard accordingly presented a Bill to place a duty on the Secretary of State to ensure that appropriate assistance is provided to people returning to the United Kingdom, having been held against their will as hostages, and to their families; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 29 March and to be printed. [Bill 84.]

Orders of the Day — London Regional Transport Bill

Order for Second Reading read.

The Minister for Transport in London (Mr. Steve Norris): I beg to move, That the Bill be now read a Second time.

Madam Speaker: I have selected the amendment standing in the name of the Opposition.

Mr. Norris: London Regional Transport came into being technically as a statutory corporation—but more commonly described as a nationalised industry—on 29 June 1984. On that date, the London Regional Transport Act 1984 transferred political and financial control of what is generally known as London Transport, the old LT, from the Greater London council back to central Government, which had last been directly responsible for LT in 1969. As hon. Members would be aware, London Transport's principal duty is to provide or to secure passenger transport services in Greater London, having regard to the transport needs of London and to efficiency, economy and safety of operation.
The board of London Transport is headed by a chairman appointed by the Secretary of State for Transport. Peter Ford took over as chairman in September 1994 and, additionally, became chairman of LT's subsidiaries London Underground and London Transport Buses. There are currently three other full-time LT board members, one of whom is responsible for finance, one of whom is also managing director of London Underground and one of whom is also managing director of London Transport Buses. Additional part-time members, including a non-executive vice-chairman, bring a wide range of outside business experience to the LT board.
London Transport is also a parent or holding corporation with two wholly owned operating subsidiary companies. The first company is London Underground Ltd., which is responsible for the operation of the London underground. Since April 1994, it has included the Waterloo and City line between Waterloo and Bank, which was formerly operated by British Rail. The second wholly owned operating subsidiary is Victoria Coach Station Ltd., which is the principal London terminal for national and international express coach services, serving more than 1,000 destinations in 21 countries, with some 170,000 departures each year. Although VCS administers the coach station, it is not responsible for the operation of the coach services using it—they are the responsibility of the individual contractors.
A third operating subsidiary, London Buses Ltd., effectively ceased to trade when its 10 component companies were sold into the private sector by the end of 1994. London Buses Ltd. was set up in 1985 to operate London Transport's bus services and had, in turn, set up locally based subsidiary companies in anticipation of the new arrangements for bus services in London—although the Government announced in November 1993 that the original planned deregulation would not be implemented before the next general election. LT began competitive


tendering of its bus routes in 1985, and in 1993 those LBL routes not yet involved in the tendering process were placed on a contractual basis.
That development, together with the sale of the LBL subsidiary companies in 1994, placed those companies on a basis similar to that of the private companies which are also operating bus services on behalf of, or under contract to, London Transport. Overall responsibility for all bus services in London is now exercised by London Transport Buses, which is a department of LT, but with its own chairman, managing director and management board.
Against that background, the Bill is essentially technical in its nature. Its purpose is simply to extend the powers of London Transport in order to allow it to make full use of the opportunities available under the Government's private finance initiative. The Bill has the full support of LT itself. I should say that it was London Transport that identified the deficiencies in the existing legislation which the Bill is intended to address and which asked the Government to assist in taking that forward.

Dr. Norman A. Godman: rose—

Mr. Nigel Spearing: rose—

Mr. Norris: I give way first to the hon. Member for Greenock and Port Glasgow (Dr. Godman).

Dr. Godman: I hesitate to intervene in a London debate, but as someone who travels frequently between Heathrow and Westminster, may I ask the Minister whether anything can be done to improve the tube service between Heathrow and the centre of London, not just for Members of Parliament, but for visitors from our constituencies to the capital? We hear over and over again from our constituents the complaint that they have to put up with that terrible tube service between the airport and the centre of London.

Mr. Norris: One of the things that I have learnt about being responsible for transport in London is that there are 651 Members who have an interest in it. Although one's constituency may not be in the capital, hon. Members are likely to spend most of their week in it. Certainly, with regard to the licensed taxi industry I have at least 651 additional constituents with whom to deal. Therefore, I well appreciate the hon. Gentleman's question.
The hon. Gentleman will know that the hon. Member for Workington (Mr. Campbell-Savours) raised that matter in the House a few weeks ago. When I heard of his complaint I made it my business to take a personal interest in the apparent inadequacy of the arrangements for boarding the Piccadilly line. I have done it myself on many occasions and I agree that the service there is not as good as it should be because of the physical constraints of the layout of the station within the airport and also because of the difficulty that people often have in acquiring tickets, perhaps because they do not have change or British currency in their pockets, or because they have to ask questions in a foreign language or through some intermediary at the ticket office. All that means that the process of buying a ticket at Heathrow is infinitely more complicated than it is likely to be elsewhere.
London Transport has a programme of improvements for Heathrow station. Bob Bayman, the general manager of the Piccadilly line, has been in touch with hon. Members, circulating a note of the improvements. I can assure the hon. Gentleman that I will take a personal interest in ensuring that those improvements are delivered.

Mr. Spearing: rose—

Mr. John Marshall: rose—

Mr. Norris: I shall give way first to the hon. Member for Newham, South (Mr. Spearing), who caught my eye previously, and then to my hon. Friend.

Mr. Spearing: May I revert to the Minister's remark that this is a technical Bill? Clearly, reading the long title, it is to extend the powers of London Regional Transport. In the notes on clauses, under clause 1, paragraph a says:
the carrying on by the contractor of activities which LT do have the powers to carry on, in particular the provision of public passenger transport services.
But clause 1 itself says:
to … carry out an agreement with any person for the carrying on by that person (`the contractor') of any activities which London Regional Transport does not have".
It makes out that that can be done only with the consent of the Secretary of State. Therefore, surely the Bill gives the Secretary of State extra-statutory powers to let the contractor for London Transport do anything that he and London Transport want to be done. Is not that more than technical?

Mr. Norris: No. I am grateful to the hon. Gentleman because Bills such as this ought to be subject to forensic scrutiny and it is perfectly appropriate that he should raise that extremely important question. In many ways, it is the whole question posed by the Bill and the Opposition's reasoned amendment. But I shall be at pains to demonstrate in what I have to say on the subject that the technical amendment is simply to allow London Transport to benefit from the full potential of the private finance initiative, and that means the need to extinguish technical bars to its doing so, which I do not believe any hon. Member would seek to place in its way. I will give the hon. Gentleman a firm undertaking from the Dispatch Box that nothing in the Bill is intended to extend the effective powers—the de facto powers—of London Transport or, indeed, of the Secretary of State. I shall go on to assure the House that the intention behind the Bill is specifically not that about which concern is expressed in the reasoned amendment. I hope that the hon. Gentleman will allow me, as I develop my speech, to respond in more detail to the points that he has raised.

Mr. John Marshall: I revert to the question of Heathrow. Does my hon. Friend agree that one of the most important developments at Heathrow is the Heathrow to Paddington link, which is a joint private and public sector project? Can my hon. Friend tell the House when he expects that link to be up and running?

Mr. Norris: My hon. Friend is absolutely right, and that investment of £300 million by the British Airports Authority has set a considerable precedent in the provision of privately owned railways. The project is


intended massively to improve the public transport rail link between all the Heathrow terminals and central London. BAA is investing some £300 million in that large and imaginative project, and I am delighted to be able to tell my hon. Friend that in my most recent conversation with BAA, it confirmed that it hoped that the trial running of trains would begin next year, in 1997. Obviously. regular scheduled services will follow on from then.
As I understand it, the major restraint is the time it has taken to finish tunnel work into the airport terminals. The idea behind the scheme is that passengers and their baggage will have direct access to the rail link from the airport terminal at which they arrive. They will not be required to change terminals or to go outside in all weathers. Such seamless transfers will be attractive to every class of traveller, including the business user. In the past, some business users have chosen to use private cars or other forms of personalised transport, especially if they are going into the City—although that can be a very long and arduous journey. It does not take as long as it takes to get from Narita airport to the centre of Tokyo or to make a similar journey in New York or Paris, but it takes a very long time. The project will provide a high-quality link to the centre of London that will be attractive even to those business users who are met by chauffeur-driven limousine, because that will not have to be at Heathrow. It will be a tremendous benefit to other road users and the communities in that area.

Mr. Simon Hughes: As somebody who served his time during the consideration of the London Regional Transport Act 1984, I return to the question asked by the hon. Member for Newham, South (Mr. Spearing). His question expressed the key concern about the Bill, although we support the other aspects of it.
Clause 3 would add a new section-31B—to the 1984 Act, which would provide that
the Secretary of State may by order provide for any functions of London Regional Transport under any statutory provisions to be exercisable by that person",
"that person" being the agent. Does that section, when read together with section 3 of the 1984 Act—irrespective of the Minister's intent—permit the wholesale transfer of functions, either bus or rail or tube, to another body? I understand that the Minister says that that is not the intention, but what can he say to persuade us that the Bill would not permit that?

Mr. Norris: As the notes on clauses show, the new section 31B(1) would enable the Secretary of State
to provide that certain of LRT's statutory functions are to be exercisable by"—
a contractor—
for the purposes of carrying out agreements
under section 3(2) or (2A) of the London Regional Transport Act 1984. That means that the obligations laid on London Transport to provide services will not alter. What will alter is how LRT can procure such services so as to allow it to get the best value from the private finance initiative. On occasion, it will have the power, in a given commercial eventuality, to carry out such functions for itself.
The hon. Members for Southwark and Bermondsey (Mr. Hughes) and for Newham, South have both asked the important question in this context. I can tell them that

nothing in the Bill extends the powers of London Transport in the exercise of its functions. Nor does the Bill extend its field of responsibilities. They remain as defined in the 1984 Act.

Mr. Hughes: I understand that exactly. Section 3(2) of the 1984 Act gives LRT a statutory duty to provide an underground service, for instance. Although LRT may retain that statutory duty, what is to stop it contracting out wholesale any or every line of the network? Nothing on the face of the Bill would seem to prevent that. If the Bill becomes law, LRT could immediately give the private sector responsibility for running every tube line across Greater London.

Mr. Norris: The answer is that the powers given to LRT in the 1984 Act permit it to do precisely what the hon. Gentleman suggests—we should be under no illusions about that. Opposition Members will seek to draw out from me a commitment not to privatise; that is basically what their reasoned amendment is after. In due course I shall come to that point in my speech. I must repeat, however, that nothing in the Bill adds to the general powers that LRT possesses.
The specific power to which we are all referring is the power to provide or procure services in the context of public transport. The Bill represents no increase in that area of responsibility. London Transport is not being allowed to move outside the provision of public transport services. Moreover, there will be no change to LRT's ability to extend the involvement of contractors in its business—save only what is in the Bill.
Neither this Bill nor the 1984 Act provides for LRT to wind itself up. My advice is that further legislation would need to be brought before the House for that to happen. The hon. Member for Southwark and Bermondsey would no doubt want to make his own contribution on that occasion.
In short, a great deal of what the hon. Gentleman has suggested is already possible under LRT's current powers. The Bill deals with some practical areas for which its current powers are manifestly deficient. The deficiencies were brought to our attention by LRT. When it first told me that it needed more powers, my reaction was to ask it to go away and carefully justify the need for additional legislation. LRT did precisely that, and has furnished me with some examples with which I believe the hon. Member for Southwark and Bermondsey will be satisfied. I know that, throughout the years he has represented a London seat, he has always been a great supporter of London Transport. Like him, I want LT to deliver the best possible value for money. The central message is the acceleration of the improvement in services that all hon. Members want to see.
On that basis, I hope that the hon. Gentleman will be assured that nothing in the Bill extends LT's current power to proceed further with contracting. The Bill simply facilitates what hon. Members wish to achieve.

Mr. Spearing: In reply to the hon. Member for Southwark and Bermondsey (Mr. Hughes), the Minister has partly answered my question. As he is contemplating a contract for a power supply company under the current powers of the Act, surely it will be possible for, say, Wisconsin Central to lease the Central line to run trains or provide some of the line's functions and for the District line to have a management buy-out. If that is possible


under the Act, all he is saying is that the Bill will make it simpler under the PFI. Will he assure the House that that is not the intention and that London Transport will not be privatised on the pattern of British Rail, Railtrack and the present operators?

Mr. Norris: I can give the hon. Gentleman that assurance. LT may wish to enter into a power supply contract to improve the quality of its power supply. Hon. Members will recall the power supply failures of 18 months or a couple of years ago. Power supply failures account for a substantial proportion of total failures in the system. Much investment, therefore, is clearly necessary. It is likely that the most efficient contract would involve LT purchasing power from a contractor that may wish to sell additional power supplies to third parties. That is perfectly reasonable. It would represent an excellent deal to LT and a perfectly sensible deal to the contractor. We wish to put in place arrangements to allow London Transport to take over the contractor's function and to continue the commercial arrangement without disadvantaging Londoners. That is a perfect example of how the Bill will work sensibly and very much in the public interest. It will procure good value for money and sensible commercial bases for the contracts into which LT will wish to enter.

Mr. Simon Hughes: This will be my last intervention on the Minister's speech; I am grateful to him for giving way.
Clause 2 deals with land and its disposal. Will the Minister help the House by saying what is permitted under the clause? Quite a lot of LRT's land is not used for transport operations. Will it be possible under the Bill—it could not do this otherwise—for LRT to enter into a contract with an hotel or leisure chain to build and jointly operate an hotel, as some water companies did after privatisation?

Mr. Norris: We are having almost a Committee debate on technical points, but as the Bill is broadly technical in nature I see no reason why I should not attempt to give the hon. Gentleman as full an answer as I can.
Let us take the example of a contractor who acquires land that LT would need at the end of a contract. It might involve land on which a power sub-station is to be built, the power project having some limited life. Clause 2 ensures that the freehold could be acquired in LT's name, albeit that the land would have been identified by the contractor, who would be responsible for its development. The purpose is to minimise the possibility of disputes over ownership at the end of a contract. If we did not frame the Bill in that way, when a contractor's relationship with London Transport had ceased, the contractor would then have a sub-station on land that was not technically owned by London Transport, and London Transport would therefore encounter some difficulty in offering a re-tender to another party. We are providing a more flexible basis for London Transport to enter into such contractual arrangements without altering the basis of the powers that it exercises.

Mr. Edward Garnier: I wonder whether my hon. Friend can help me. I am trying to identify the

area of controversy between the two sides of the House. Is it simply the hoary old argument about the introduction of private finance into public services, or am I missing something rather more complicated?

Mr. Norris: No doubt, as this afternoon drags on—I mean, continues—my hon. and learned Friend will find the answer to his question. It may well be that, with his customary perspicacity—perspicacity that he has charged many a client thousands of pounds to savour—

An hon. Member: And many years to regret.

Mr. Norris: Indeed—but I cannot possibly say that to my hon. and learned Friend, who comes from a distinguished libel chambers and with whom I do not wish to tangle.
My hon. and learned Friend has put his finger on what is, I suspect, at issue in the "reasoned amendment"— a euphemism if ever I heard one—that the Opposition have tabled. They simply say, "We have read the Bill and see nothing exceptional in it, but because the word `private' occurs somewhere in it, can we assume that this is privatisation by the back door?"
I think that my hon. and learned Friend has touched a raw nerve. The deputy leader of the Labour party, the right hon. Member for Kingston upon Hull, East (Mr. Prescott)—who was a very vocal transport spokesman and who is, if I may say so, a very great man—has said on many occasions that he invented the private finance initiative. [HON. MEMBERS: "Hear, hear."' Hon. Members are keen to press the right hon. Gentleman's claim. In that case, I am an inadvertent convert to his cause. I have been a convert to the cause of privatisation from my mother's milk; the difference between the right hon. Gentleman and me is that I can spell it.
The right hon. Gentleman's relationship with private finance is rather like the late Larry Grayson's relationship with rugby league—somewhat tangential. The right hon. Gentleman's idea of private finance is bludgeoning the private sector into pre-arranged contracts in which the private sector puts up all the money and takes all the risk, while he and his hon. Friends reap a reward that simply is not there, because the private sector never invests on that basis. But, in so far as there is great joy in heaven over every sinner that repenteth, I am delighted that Opposition Members have been converted to the cause of the private finance initiative, and that they are apparently prepared to support the Bill.

Mr. Brian Wilson: I am glad to hear the Minister reassuring himself that there may still be a place in heaven for him, but I am sure that he will go on to reassure the hon. and learned Member for Harborough (Mr. Garnier) that we might all have been saved a good deal of trouble today had it not been for the blundering, inopportune remarks of the Deputy Prime Minister, who became entangled in the debate just when we might have been considering whether the Minister's assurances were to be taken at face value.

Mr. Norris: With great respect to the hon. Gentleman, I am relaxed about the private sector's involvement in the provision of services, and that goes to the heart of my


remarks about the Labour party's attitude. Clearly, it is not relaxed. I am because the function of any Government, never mind that of London Regional Transport in relation to public transport services, is to provide or to procure services. In the health service, for example, it is important that the service should remain free at the point of delivery on the basis of need and not of means. To procure that, we should use the most efficient means of investment, bearing in mind the fact that, in such circumstances, the taxpayer is hard pressed to meet all the demands placed on him or her by the Government, whatever party is in power.
In this case, an absolute key to my proposition is that, in the past 10 years in particular, London Transport has made great strides in improving the quality of its services by taking advantage of massively greater public investment from this Government than ever before. My hon. Friend the Member for Chipping Barnet (Sir S. Chapman) is in his place. He has long been keen to point out the extent to which investment in London Transport has increased over the years. If he checks the figures, he will find that, at current prices, in 1979, investment in London was £167 million. It now stands at £543 million.
However, if one takes account of further expenditure on the Jubilee line extension, the real comparison is between total investment in 1979 of £257 million and investment this year—remember, these are at constant prices—of £1,880,000. That shows the huge increase in public finance committed to the underground, yet—all hon. Members appreciate this, including many hon. Members who represent London constituencies—much more needs to be done. We all recognise that the investment need is there. London Transport has identified it. In their plans for London transport, London Pride and London First recognise that that backlog is still there, although they pay considerable tribute to the Government's efforts in recent years to end it.
The essence of the Bill is that it allows us to harness more efficiently private sector resources so as to decrease that backlog even more quickly.

Sir Sydney Chapman: My hon. Friend's figures are right, but in 1978, the historic figure for investment in London Transport was only £66 million and, throughout the 1970s, the average figure was under £50 million. If he excludes even the £500 million per year invested in the Jubilee line extension, he will find that investment in London Transport is well over £500 million and has been for the five years of this decade. Allowing even for inflation, that means that, under this Government, we have quadrupled the amount of investment in London Transport. Does he agree that, if hon. Members on either side of the House still say that more investment is needed, because of the necessary priorities of Government spending, that investment can and must come only from private finance initiatives?

Mr. Norris: My hon. Friend has touched on an extremely important point that directly relates to the Bill. None of my right hon. and hon. Friends should ever take criticism of the Government's investment record on public transport in London, for it is exactly as my hon. Friend said—about quadruple that available under the Labour Government. We are trying to accelerate total investment on the basis that we, at least, recognise that the key is that

investment should be provided. We. at least, are not blinkered by the extraordinary presumption that somehow investment does not happen unless it is investment by taxpayers. We, at least, look for—and we say so wholeheartedly and openly—investment from both the public and the private sectors to ensure the efficient development of services.

Mr. Keith Hill: Will the Minister confirm that, until 1969, London Transport operated under a break-even requirement, and that its first call upon Government for funding did not occur until the late 1970s, for macro-economic reasons? Is it not therefore entirely bogus to draw comparisons between levels of central Government funding in the late 1970s and the current period? Would it not be more germane to reflect upon the fact that, in 1992–93, core funding for London Underground stood at £683 million per annum; and that, in two years' time, it will stand at £435 million? That is a deplorable comment on the Government's lack of investment in London Underground.

Mr. Norris: The devil may quote scripture for his purpose, but I read from the authentic work. The hon. Gentleman may squirm on the definition of public expenditure in London. He may try, under the great umbrella of the Greater London council, to bury the clear evidence that I and my hon. Friend the Member for Chipping Barnet elucidated—and, my goodness, there is not much that went wrong in London during the GLC's years that was not attributable to the GLC. The reality is one from which the hon. Gentleman cannot escape.
If the hon. Gentleman is referring to the fact that, over the past few years, investment has been at even higher levels than at present, I am grateful to him for drawing the attention of the House to that. He is right. If I had picked the most embarrassing statistics on which to judge the records of the Opposition and the Government, I would have referred to even higher levels of investment in previous years. However, as they already stand at an all-time high, I doubt whether the hon. Gentleman is on safe ground in criticising them. Of course, he has not let that stop him in the past, and I am sure that it will not stop him in future.

Ms Glenda Jackson: If the Government's investment in, for example, London Underground over the past 16 years has been so consistent and so large, why is it that, for the first time in its history—or so I believe—London Underground will have to close four separate sections of track and the Bakerloo line for about seven months simply to catch up on the backlog of maintenance work that it has been unable to fund until now?

Ms Diane Abbott: Go on, answer that.

Mr. Norris: The hon. Lady says, "Go on, answer that," as though that were a challenge.
First, I shall dissect the question, why is London Transport doing so much maintenance work that it has not previously been able to afford? I wonder whether it might have anything to do with the fact that it now has the money to do the work and the willingness to get on with it. The extraordinary double standards of the Labour party


are that it claims bitterly that there are inadequate maintenance resources, and then, when the work is being done, it complains about what it alleges to be disruption. It is the most fatuous example of double standards. The hon. Member for Hampstead and Highgate (Ms Jackson), who has considerable knowledge of London, knows better than that. She makes her point better than I could.

Mr. Wilson: The Minister surely realises that maintenance work often takes place because capital is not available for renewals. I am sure that he understands that basic point, and would wish to acknowledge it.

Mr. Norris: I do acknowledge it. The hon. Gentleman and I have had many discussions on the matter over the years, and he understands the issues extremely well. We have an entirely cordial relationship; we get on. I say to the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) that I admit that, as my political career enters its twilight, the matter is more likely to damage the hon. Gentleman's political prospects than mine—but I am ruthless in such circumstances.
The hon. Member for Cunninghame, North (Mr. Wilson) is quite right. If one does not spend on capital, one almost inevitably reaps the consequence of higher levels of maintenance expenditure. London Transport, above all, is based on a culture of safe operations, which means that at no time is safety prejudiced—even if that means slow running or closures.
There is common agreement on the thesis, and that is why I know that the Labour party supports the main thrust of the Bill. We all want to accelerate the capital investment through use of the PFI, which will enable us to avoid producing a railway in which disruption brought about by historic under-investment and the need to accelerate the improvement programme happens more often than either the hon. Member for Hampstead and Highgate or I would want.

Mr. David Chidgey: I listened intently to what the Minister said about lack of investment. I think that he was referring to the planned closure of the Bakerloo and Northern tunnels under the Thames. He must be aware of the massive disruption that that will cause. Does he therefore agree that one could foresee the need for capital investment many years ago? Has not the fact that capital investment was not made available led to this sorry and parlous state?

Mr. Norris: The work would have necessitated closure whenever it happened. The hon. Gentleman is—I think—about the only hon. Member who is a fellow of the Institution of Highways and Transportation, and may therefore appreciate the civil engineering implications of the work. For example, in order to ensure entirely safe operation, the work at London Bridge requires continuous periods of ownership of station and track. In such circumstances, it is therefore necessary to close the line, and would have been, regardless of when new investment in London Bridge was made. I have LT's specific assurance on that matter.
It will not surprise the hon. Member for Eastleigh (Mr. Chidgey) that, if we could have achieved the renewals programme without any closures—although it

may have taken slightly longer to deliver—I would have been very keen to do so. Nobody likes to announce such closures. Having been satisfied that, for good, sound operational and safety reasons, it was right for London Transport to go ahead with the work and effect the closure, my job was to ensure that the closure was minimised to every possible extent, and that London Transport was able to carry out the works.

Mr. Peter Bottomley: I am sure that the House will appreciate and agree with my hon. Friend's explanation of those major capital works. May I return for a moment to the subject of Heathrow? Could my hon. Friend discover what London Underground regards as an acceptable time for anyone to wait in a queue to pay to travel? If it is not possible either to make change available so that people can use coins in the machines or for more kiosks to be open, could people who have had to wait for, say, more than five minutes be issued with a free pass? LT might then start getting people to sell tickets.

Mr. Norris: There are two aspects to my hon. Friend's point. As he will readily know from his experience, ticketing arrangements on the underground are necessarily complex. Point-to-point journeys require a knowledge of station names at both ends, which have to be found on the automatic machines, as well as the journey type—single, child or return fares. Day travelcards are also available from machines. The system is therefore quite baffling to newly arrived visitors to Britain.
London Transport is looking at a much simplified ticketing system that does not require staff to dispense tickets. That is of course where real economies can be made—indeed, it is extraordinarily efficient. Most hon. Members will find it more convenient and easier to drop the coins or feed a note into the machine to get a ticket. Certainly I do, but that is because I know my way around.
I readily agree with my hon. Friend the Member for Eltham (Mr. Bottomley) that that is by no means always the case. At Heathrow in particular, as I said in answer to an earlier question originally raised by the hon. Member for Workington, London Regional Transport does indeed need to address the issue; it is a real problem.
I shall take back my hon. Friend's suggestion that there should be some form of reimbursement scheme—although I cannot imagine that LRT will find it especially attractive. It will at least reveal the scale of my hon. Friend's concern.

Mr. Bottomley: There is a serious point here, especially for people who are not regular visitors to London and do not work here, as Members of Parliament do. For overseas visitors to arrive here and find themselves stuck in a queue for more than five minutes is unacceptable. Not only London Underground but Members of Parliament have a duty to ask for—indeed, to demand—the ability to get on to the underground within five minutes of arriving at an underground station. That is the minimum that we should demand.

Mr. Norris: I understand my hon. Friend's concern; indeed, as I have said already, I share it. I hope that the work


that London Underground has announced will be carried out at Heathrow can be done quickly, and will bear early fruit. I cannot think of a worse way of welcoming visitors to Britain than for them to encounter an incomprehensible arrangement for getting on to the metro system. That is especially true when we should encourage not only those whose first language is not English but many visitors from within the United Kingdom to gain access to central London via the Piccadilly line.

Mr. D. N. Campbell-Savours: rose—

Mr. Norris: I give way to the hon. Member for Workington, who has arrived late to a discussion of which he is to some extent a parent.

Mr. Campbell-Savours: Yes, I think I am the parent. I have been in correspondence with the director of whatever the London transport undertaking is called—is it London Underground Ltd. or something?—and I do not think that the Minister has grasped what I am on about. In the letters that I have received from him, the most recent of which arrived last week, the hon. Gentleman does not seem to understand the fact that our complaint is about windows being closed when there are long queues of people.
However much I stress that fact, the Minister has not grasped it. I have asked only that, when there are queues, all the windows should be open. That is all—no more. Yet the Minister writes back to me with long explanations about all the other initiatives that are taking place, including selling tickets halfway round the world. Those are irrelevant to my complaint.

Mr. Norris: I appreciate that point, and I explained to the House before the hon. Gentleman arrived that I was taking a personal interest in it. Indeed, he will know that, when I saw his early-day motion, I wrote and told him that I too was concerned, and wanted to take the matter on personally. I can give him and the rest of the House an undertaking that I shall monitor progress.
We are all not only Members of Parliament but travellers around the system in the normal way, as the hon. Gentleman is. Like me, he has every right to feel frustrated when it looks as if a half-time service is being provided when there are clearly queues of people wishing to be served. That cannot be right, and I assure him that I shall take a close personal interest in the matter.

Mr. Garnier: If what the hon. Member for Workington (Mr. Campbell-Savours) and my hon. Friend the Member for Eltham (Mr. Bottomley) have said is true, the answer is to second a manager from a supermarket. No supermarket would tolerate long queues at a checkout.
Moreover, if what the hon. Member for Streatham (Mr. Hill) and other Opposition Members have said is right—for the purposes of argument, let us assume for a moment that it is, although I do not accept their contention—and the Government have engineered appalling levels of investment in London Transport over the past 15 or 16 years, surely the answer is to vote for the Bill.

Mr. Norris: The trouble with having bright lawyers in the House is that they always ask the right questions. My hon. and learned Friend has gone straight to the heart of the Bill.
We can defend our position indefensibly, as the hon. Member for Streatham (Mr. Hill) tried to do, or in a concrete way, as I tried to do, but it does not matter, because, whatever the present level of investment, we all agree that more is needed. If we agree about that, and if we agree—as appears to be the policy of the Labour party—that the public sector cannot be landed with further commitments and none of us wishes to burden the taxpayer more than necessary, my hon. and learned Friend is entirely right to say that we should support the Bill, and I hope that in due course the House will do so.
If I may, I shall say something about the Bill itself. [Laughter.] It may be a somewhat novel proposition, but none the less I intend to advance it. I appreciate that it may be a risible notion.

Mr. Peter Bottomley: Bulldozer Norris. Mr. Norris: None the less, I shall try.
It is generally agreed that London Transport has made substantial strides in improving services and efficiency in recent decades. The quality of service has progressively improved, and LT has been right to focus carefully on the needs and views of passengers, thus reflecting the principles of the citizens charter—a charter in which I strongly believe.
The citizens charter gives consumers of services which, as it happens, are provided by the state, the rights that they would automatically expect to enjoy if those services were provided by the private sector. The citizens charter has been one of the singular achievements of my right hon. Friend the Prime Minister. In my opinion, it is not yet appreciated how much it is changing the culture of public services and instilling in them a recognition that, at every level of interface with the public, the public have a right to demand quality of service from operations in the public sector, just as they have the right to demand those services in the private sector.
London Transport's charters for tube and bus users emphasised its commitment to that concept. Efficiency in services has also been much improved by measures such as London Underground's company plan and the contracting out to the private sector of non-core services.
Much of that improvement reflects a transformation in the management of LT and the efforts of LT's hard-working staff, but much has depended on the availability of funds for investment. Much of the underground network dates back to about the turn of the century, so much of it needs to be renewed and brought up to modern standards.
To help meet that need, investment has been running at record levels. As my hon. Friend the Member for Chipping Barnet reminded the House, this year LT will invest more than £1 billion. More than half is being devoted to improvements in the existing network, such as the comprehensive upgrade of the Central line—which, purely accidentally, happens to go through my constituency—which nears completion, and the remainder is principally being spent on the construction of the Jubilee line extension.
To date, most of that investment has been funded by the taxpayer, although I emphasise that the operating surplus that is now being generated by LT is making an increasing contribution. There is often criticism that fares on London Transport are relatively high. That criticism, in so far as it draws comparisons, is a fair comparison.

Ms Glenda Jackson: It is a justifiable criticism.

Mr. Norris: I hear the hon. Member for Hampstead and Highgate say that it is a justifiable comparison. I believe that in that respect she is correct, but I want to make it clear that investment in the service can be funded only by the taxpayer or the farepayer. It is vital that we get the balance right and that we look to farepayers—those who use the service—to make a substantial contribution to investment in the system.
For every pound by which lower fares would not cover the running costs of an operation such as London Transport, it would be necessary for any taxpayer contribution to make good that deficiency before it could be invested in improving the service.
I am therefore proud that, in the nearly four years that I have been responsible for London Transport and have been the Minister to whom its chairman has been answerable, we have moved from making losses to making a substantial operating profit, which has then been made available for accelerated investment. The House must not ignore that consequence of a fares policy that I am frequently asked to justify in answer to tough questions from reporters and commentators.
Although our approach is entirely right, we and LT are keen for the private sector to make a fuller contribution to investment financing, which I believe is a common aim among hon. Members on both sides of the House. If we can involve the private sector more directly in the financing and provision of public services, it will help us to deliver higher-quality and more cost-effective services through the exploitation of the full range of private sector commercial, management and creative skills. The Government's private finance initiative has been designed to do precisely that.
LT has already achieved conspicuous success with the PFI through the contract we concluded last year for the provision of new Northern line trains. Hon. Members on both sides of the House with constituencies through which the Northern line runs have very much welcomed that announcement. That £400 million deal will provide a new train service for one of London Underground's busiest lines, with the supplier, GEC Alsthom, taking the responsibility for, and the risk of providing and maintaining, the required number of trains to run the service for the next 20 years. Those new trains are expected to begin entering service from the middle of next year.
London Transport is naturally keen to make further use of the PFI, and competition for further substantial schemes is already in hand. To illustrate the need for the Bill's technical measures, I should like to mention four of the most immediate PFI projects, the first of which is in relation to communications.
We have undertaken a project with LT that will require a contractor to provide an integrated radio system for the underground, based on a fibre-optic network. The network will not only provide updated systems for London Underground's communications systems, but will have sufficient spare capacity for the contractor to provide telecommunications and information technology services to third parties. Sharing costs in that way will greatly reduce the cost to LT. [Laughter.] Does the hon. Member for Newham, South find something amusing in that concept? If so, would he care to unburden himself of it?

Mr. Spearing: Imagine a cable going through a tunnel that takes not only London Transport's traffic, as it

currently does with conventional cable, but that of other businesses as well. At the same time, someone will be running the trains, and someone else may be contracting for the track. Imagine the complications that will ensue as to who will deal with safety, who will be trained to do what, and what the line of management will be.
The Minister should consult railwaymen about the difficulties that have already been encountered above the ground and the risks that have been taken because of all sorts of patterns of mismanagement. He would then discover that the risks to the underground in London would be increased by contracting out power and telecommunications facilities, and possibly ticketing, to individual contractors.

Mr. Norris: I am tempted to dissect the hon. Gentleman's intervention in the same manner as I did that of the hon. Member for Hackney, North and Stoke Newington, but I shall content myself by observing that he has set his face against the use of the PFI in respect of telecommunications.
The hon. Gentleman's stance will not sit easily with that of his colleagues on the Opposition Front Bench, but that is a matter for him. He is pretty old to be a member of new Labour, and I suspect that he might have the skids placed under him very quickly if he goes on in that old recidivist vein. There are ugly rumours that that has already happened. I have personal affection for him because he is a good cyclist and enjoys the river, so sharing two of my passions. I fear that we may be seeing the last of the hon. Gentleman with outbursts of that sort. His point is a logical absurdity.
There is not the slightest difficulty in running the cabling in the way we propose. The only difference, on which the Bill concentrates, is the issue of the spare capacity that the contractor may wish to sell to third parties, the effect of which would be to defray costs that would otherwise have to be borne by London Transport. This is a straightforward way to optimise the cost to the taxpayer and to the service.

Mr. Peter Bottomley: My hon. Friend has answered that point very well. I wish to raise a separate issue that does not necessarily require an immediate answer, but I would like my hon. Friend to consult railway operating businesses about it.
If a train for some reason comes off the track, neither automatic train protection—if it is available—nor other communication systems can immediately tell a train coming in the other direction or on an adjacent track that the line is blocked. Will my hon. Friend consult his technical experts to find out whether there is some way for a driver or guard, if there is one, to advise other trains in the locality, whether underground or overground, that they should stop, even though they cannot see a signal?

Mr. Norris: I shall ask London Transport for an answer to that question. It is in the interest of the system as a whole that we have an effective and instantaneous method of communication on the underground system.

Mr. Bernard Jenkin: I may be speaking out of turn, but I understand that there is such a system, and that it is extremely simple. Along the side of the tube, two exposed wires run parallel to each other.
If any driver or member of staff wishes to stop traffic on that track, he squeezes the wires together, which creates a circuit, sends a signal and cuts out electricity to all trains on that track. It is simple technology. It does not matter who owns the wires or how they are financed—it will still work.

Mr. Norris: My hon. Friend is right, and I especially endorse his point on the ownership of the two wires, but the question posed by my hon. Friend the Member for Eltham was slightly different. He asked about how the information could be transmitted more widely and how more useful information could be transmitted, rather than merely about switching off the power to trains in the immediate vicinity of the point where the power has been disconnected. I will send a reply on that to my hon. Friend, and copy it to my hon. Friend the Member for Colchester, North (Mr. Jenkin).
The second type of PFI project we want to undertake involves ticketing and what we call the "prestige" project. It would involve the complete modernisation of London Transport's ticketing systems, based on the progressive introduction of smart card technology. The contractor would take over responsibility for providing and selling tickets for tube and bus services and for the equipment to validate them, such as the ticket gates at underground stations.
Giving the private sector responsibility for the whole system would itself provide scope for the introduction of innovative and efficient systems. As with the communications project, there may be scope to spread costs if the smart cards can be used with third parties—for instance, as an electronic purse accepted by retailers. It could be used as a means of paying for parking charges or whatever. That is the underlying basis of the need for the Bill in relation to that project.
The third scheme involves power supply. That would involve a contractor taking over LT's existing power generation plant and taking responsibility for the provision of main and emergency power supplies for the underground network. As with the schemes that I have already mentioned, the contractor would be able to spread costs by supplying power for third parties.
Finally, LT is developing plans for extensions of the east London line. Powers are being sought under the Transport and Works Act 1992 for the northern extension to the line, while LT is also considering proposals to extend its southern end. It is intended that they will be taken forward with the private sector under the PFI.
In total, those projects would involve private sector capital investment in LT of about £750 million. Competitions for two of the schemes—for power supplies and for the prestige ticketing project—are under way. London Transport is evaluating pre-qualification bids, and hopes soon to move to the full competition stage. London Transport is also about to invite pre-qualifying bids for the communications project.
In working up those competitions and schemes, LT has run into some potential or actual legal problems in taking them forward within the PFI. As I have said already, LT's powers derive from the London Regional Transport Act 1984, when schemes of that sort were simply not envisaged. The Act, quite rightly, constrains LT's powers to public transport, so as to prevent its becoming, in effect, a Government-sponsored general trading

company. However, it has now become clear that the effect of those restrictions is also to circumscribe LT's ability to enter into agreements under the PFI, whereby the private sector party to the agreement would carry out non-transport-related activities.
For example, under its present powers, LT could not enter into agreements of the sort proposed for communications, power or ticketing to the extent that they would involve the private sector partner in the provision of services to third parties to any substantial extent. Nor could LT enter into agreements that might at some stage need to be transferred to a third party: for instance, if the original contractor were to default and the financiers to the deal wished to appoint a new contractor.
Unless addressed, those restrictions will limit the scope for LT to execute successful PFI deals, and will especially reduce the opportunities for pursuing deals involving the use of assets both for LT's own services and for third parties, which promise value for money and the benefit of private sector funding.
The aim of the Bill, which, as I have said, commands the full support of London Transport, is therefore to remove those constraints, and to ensure that LT has the ability to make full use of the PFI. Given the desirability in principle of removing impedances to the PFI, and given that the problems that have been identified would prevent LT from taking forward schemes for which it has competitions under way already, it is clearly important to put the deficiencies right as quickly as possible.
Before I go on to explain the purpose of the Bill in more detail, I should like to emphasise—[Laughter.] It is an important measure. I shall emphasise to the House what the Bill does not do.

Mr. Wilson: There must be an hour or two in that.

Mr. Norris: Indeed.
The Bill is not intended to widen the role or functions of LT itself, other than where that is necessary as a by-product of facilitating PFI schemes. As I said before, we are not in the game of setting up LT as a general trading company.
In response to the amendment tabled by Labour Members, I reassure the House that the Bill in no way erodes LT's powers or changes its status. It is not a privatisation Bill; thus, it does not affect the basic duty of LT—as set out in section 2 of the 1984 Act—
to provide or secure the provision of public passenger transport services for Greater London".
Nor does it affect LT's functions under section 8 of that Act in relation to the planning of fares and services. The Bill does not change the wide range of other provisions in the 1984 Act that would almost certainly need to be changed if the underground were to be privatised.
Of course, we on Conservative Benches believe in the benefits of privatisation, which have proved themselves already in so many transport industries: British Airways, the British Airports Authority, the National Bus Company, the National Freight Consortium and the ports, to give just a few examples. Those benefits are now being extended to the national rail network.
However, we have no plans to privatise London Underground, and we are not in the business of privatisation by stealth. The Bill is essentially a technical one. It has the strictly limited aim of extending—

Mr. Michael Stephen: Shame.

Mr. Norris: I hope that my hon. Friend is not suggesting that it is a shame that the Government do not act by stealth. He may be suggesting that the Government have a real enthusiasm for the benefits of privatisation, which I heartily share.

Mr. John Marshall: Does my hon. Friend accept that London's commuters are concerned about the quality of service and the level of investment in the underground? Many of them would welcome privatisation, because, wherever it has taken place, it has led to increased investment and better-quality service. The sooner my hon. Friend gets on his bike and privatises London Underground, the better.

Mr. Norris: My hon. Friend is correct—although I do not wish to inflict the sight of me on my bike upon more Londoners than is absolutely necessary.

Mr. Jenkin: The Minister is seeking a transformation of London Underground, the like of which has been achieved in other nationalised industries only by privatisation and the preparations for it. I wish him well in trying to transform that business, while keeping it in the public sector. However, I fear that customers will expect a complete transformation—particularly when they see the success of rail privatisation and how services have been transformed. [Laughter.] We are now hearing hoots of derision from Labour Members—as we did with British Airways, British Telecom, and so on.

Mr. Deputy Speaker,: I see that you are looking at me sternly, but I wish to make the point that, unless we actually achieve that kind of transformation in customer service, we must surely look to go to the next stage—to go the whole hog—and shift the business into the private sector, so that we get access not only to private capital but to private sector management techniques. That will lead to the transformation we seek.

Mr. Norris: The issues of private or public ownership and capital are germane to the Bill—they are the very essence of it. I heartily endorse my hon. Friend's observations about the extraordinary success that privatisation has brought to British Airways, for example. He is entirely right to remind hon. Members that, when the privatisation of British Airways was debated in this place, Labour Members constantly decried the proposition, derided it, and said that it would never work in commercial terms.
Labour Members pointed to the fact that no nation in Europe had privatised its national flag airline, and that it was therefore, de facto, impossible. They said that the baby would never fly. That baby is now not only the world's favourite airline but is hugely profitable. Instead of taking money from taxpayers to support its operation, it is making a significant contribution by way of corporation tax.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. Although this is interesting, we are debating not British Airways but the London Regional Transport Bill.

Mr. Norris: I accept your ruling, Mr. Deputy Speaker, and I have no wish to stray any further down that path, except to point out that, in relation to the involvement of private capital in transport operations, Labour Members have consistently maintained that private capital would not work, and that privatisation would not work—in this respect, they were spectacularly and self-evidently wrong.
I fear that I may have to disappoint my hon. Friend so far as London Transport is concerned. I have made it clear that this is not a plan to privatise London Transport or London Underground. I have said in quite specific terms that the Government are not in the business of privatisation by stealth.
I believe that the observations that my hon. Friend made about the success that will clearly follow from the actions that we have taken in relation to the railways—as success has followed in every other area—will soon become so clear that the cloak of obfuscation, which is all that the Opposition have been able to deliver over the last few years, will become nothing. Customers will see the benefits for themselves on the ground, in services such as the London-Tilbury-Southend service, of which my hon. Friend has some considerable experience.

Mr. Keith Hill: rose—

Mr. Norris: I shall give way to the hon. Gentleman, who is no doubt enthusiastic to point out that he has always been a supporter of privatisation, and that he wishes to endorse it on this occasion.

Mr. Hill: I may do that in due course, if I manage to catch the Chair's eye. In relation to the success of privatisation in public transport, will the Minister identify the success in the deregulation and privatisation of buses in this country? Since 1986, there has been an annual loss of 30 million passengers. Where is the success of privatisation in that?

Mr. Norris: I shall tell the hon. Gentleman very directly: since 1985, costs in the industry have been reduced by one third, public subsidies have more than halved, the proportion of routes run profitably has increased from 65 per cent to 86 per cent., and one third more mileage is being run. In the past year, the decline in bus use—which is attributable to the growth in the use of the private car—has been almost entirely arrested. Bus usage is London has increased.
That significant gain would not have been brought about without the benefit of deregulation and privatisation. However, I note that the hon. Gentleman confused the two—they are very different concepts.

Mr. John Marshall: I thank my hon. Friend for his usual courtesy in giving way this afternoon. Does my hon. Friend accept that where London Buses has put routes out to competitive tender, a process that he described earlier in his speech, substantial savings have been made? That shows that London Buses, when owned by the taxpayer, was inefficient, but when routes were put out to competitive tender, working practices improved and the cost to the community went down.

Mr. Norris: My hon. Friend is entirely right. That has been the benefit of the franchising process and of involving private bus companies in the operation of London Buses services. My hon. Friend knows that we have recently sold the operating subsidiaries of London Buses Ltd. into the private sector, many of them, incidentally, purchased by the management, and further efficiency gains and savings to the taxpayer have been brought about thereby, while the quality of the service is manifestly improving.
My hon. Friend also knows that in all the recent surveys by bus user groups, it is the privately operated services that have tended to win the first prize within the capital city. There is absolutely no doubt that we have had some tremendous benefits from the involvement of the private sector.
As I say, the Bill is essentially a technical one. It has the strictly limited aim of extending LT's powers only in so far as that is necessary, first, to remove certain restrictions imposed by the present legislation on LT's ability to enter into agreements for the purposes of the private finance initiative, and, secondly, to deal with the possibility that LT may have to take over the functions of a PFI contractor at the end of a contract.
Clause 1 would extend the scope of section 3 of the 1984 Act by empowering LT, subject to the consent of the Secretary of State, to enter into agreements with contractors which involve the contractor carrying out activities for which LT has no powers. That is needed to provide for schemes such as those related to communications and power, where the value for money of the scheme will be enhanced if the assets being provided by the private sector can be used for commercial activities as well as for purposes directly related to LT's services. Clause 1 also allows LT to enter into agreements with persons such as financiers where that is needed for the purposes of a contract.
Clause 2 makes provision for LT to acquire land, by agreement, for purposes connected with such agreements. That would, for example, as I have said, enable land to be acquired in LT's name for an electricity sub-station not directly required for LT's own purposes, but for use by the contractor in supplying electricity to LUL. I would emphasise that that is not a compulsory purchase power; it is intended to safeguard LT's claim to essential assets at the end of a PFI contract.
The clause also provides that LT may, with the consent of the Secretary of State, carry on the commercial activities of a PFI contractor when the contractor ceases to do so. That power, I emphasise, is intended to be used only as a last resort. It is not the Government's intention that, as and when PFI contracts come to an end, LT should progressively acquire a portfolio of commercial interests.
The expectation is that when PFI contracts expire, the commercial activities associated with them will normally either cease or pass to a new private sector contractor, following a further competition. But we do need to provide for what I trust will be very rare circumstances in which a contract comes to an end prematurely, for instance through default of the contractor. In that situation, LT would clearly want, and would have the powers, to take over immediately those functions connected with the running of its own services. But it would be perverse if services being provided to third parties then had to be terminated.
Thus the aim is that LT would in those exceptional circumstances be able to take over on a caretaker basis the provision of such services, pending the establishment of suitable arrangements to put them back into the private sector. The Secretary of State would expect to give consent to such arrangements only on the basis that LT would do its best to find a private sector party to take over as soon as practicable.
Clause 3 provides the facility for certain of LT's statutory operating powers, not including LT's main functions under the 1984 Act, to be transferable by order to or from another party. The aim of the provisions is to ensure that for schemes involving the provision of some aspect of passenger services involving statutory powers, those powers may be exercisable, for the duration of the contract, by a PFI contractor.
We also want to ensure that the necessary statutory powers can be exercised by LT at the end of a PFI contract. For example, a scheme for the east London line extensions might involve a PFI contractor in providing a train service, for which he would need the relevant operating powers. But again I emphasise that while in such cases a contractor might physically be providing the service, and should have as much commercial freedom as possible to respond to public demand, the service would remain within the overall control of LT under the terms of the 1984 Act.
Finally, clause 4 simply makes consequential amendments to the 1984 Act and to other legislation. Clause 5 is a standard financial provision. It does not mean that we expect the Bill to increase public expenditure. Indeed, by enabling LT to gain the maximum benefit from the private finance initiative, it should reduce LT's need for Government grant. Clause 6 contains the usual provisions in relation to short title, commencement and extent.
Summing up, therefore, the Bill is a limited but important measure which, while not affecting the fundamental role or powers of London Transport, will substantially enhance its capacity to secure maximum benefit from the Government's private finance initiative. LT has been closely involved in the preparation of the Bill and is fully supportive of it.
In particular, the Bill will enable LT to take forward and secure best value from schemes already in progress such as those relating to power supplies, ticketing and communications. In turn, developments such as those, and others in the pipeline, will deliver real benefits to passengers.
On that basis, I commend the Bill to the House.

Mr. Brian Wilson: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
this House declines to give a Second Reading to the London Regional Transport Bill because although the House welcomes the higher levels of investment in transport infrastructure provided in the Bill by the development of Private Finance Initiative projects by London Regional Transport, it does not believe that the privatisation of London Underground would be in the interests of London, and fears that this Bill contains powers which will be used to that end.
I suppose that I should first express gratitude to the Government for having managed to fit such a lengthy debate into their heavy business programme. At that point, for the benefit of Hansard, I should say: he said ironically. I also congratulate the Minister on a bravura performance.
He is put up on occasions such as this because he is one of the few who has the wit to think on his feet. That is meant to be a compliment, incidentally.
I thought that I should equip myself with suitable research, so the House of Commons Library kindly provided John Glover's "London Underground". If things should flag a bit, there is a slightly weightier tome entitled "A Regional History of the Railways of Great Britain". If, at about 8 o'clock tonight, things are really desperate, we might need some international perspective and I have here "Underground Railways of the World—Their History and Development" by H. C. P. Havers. However, I am sure that none of that will be necessary because many of my hon. Friends are anxious to contribute to this important debate on a much valued public institution, London Underground.
I make it clear that the Labour party will support any sensible measure which makes it easier for London Underground to get more money into the system for desperately needed investment so long as it is consistent with a public operation of an integrated system. In so far as the Bill advances that objective, we shall facilitate its progress. But the water has been muddied in a most unhelpful manner by the blatherings of the Deputy Prime Minister and lord high everything, the right hon. Member for Henley (Mr. Heseltine), who, only last month, was demanding that a commitment to privatise London Underground should be included in the next Tory manifesto.
It is unfortunate that the right hon. Gentleman is not with us today so that he could pay his debts to London, if to nobody else, by making it clear that his desire to privatise London Underground does not underlie the Bill. In his absence, we can only take the Minister's word for it, which I am happy to do.
But first let us consider what the Deputy Prime Minister has said. I quote from the London Evening Standard of 1 February in which we were advised that
A radical new drive to sell off London Underground to the private sector is being planned by Cabinet Ministers.
It says:
Michael Heseltine, the deputy prime minister, has told the Transport Secretary Sir George Young that he wants to include `a commitment' to privatise LU in the party manifesto for the General Election. The plan, one of a number of options being studied by Mr. Heseltine for inclusion in the manifesto, is now being actively considered by the two Ministers.
That may sound like a contradiction in terms.
The London Evening Standard continued:
Exactly how the sell-off … would be accomplished is not yet known. But, with expanding and guaranteed passenger numbers … LU has long been viewed by some senior Tories as 'ripe' and the next in line for privatisation following British Rail.
None of that is very encouraging for those of us who have followed the progress of British Rail's privatisation. I might say in passing to the hon. Member for Hendon, South (Mr. Marshall) that I would be happy to engage in a general discussion about the merits and beneficial effects or otherwise of privatisation, but the characteristic of the first two privatised rail franchises is that the managers have already said that they will make no new investment in rolling stock during the lifetime of the franchises. I see the hon. Member's brow furrow at that

modest challenge to his ideological position. I assure him that that is the position, and I heard from the lips of Mr. Brian Souter of Stagecoach that the franchising system does not allow for investment in new rolling stock. There will be no new rolling stock from South West Trains or from Great Western Trains or, I suspect, from any of the other seven-year franchises, because the system militates against investment in rolling stock.

Mr. Norris: rose—5

Mr. John Marshall: rose—

Mr. Wilson: I shall give way to the Minister, and I shall give way to the hon. Member for Hendon, South later.

Mr. Norris: I wish to say what I imagine my hon. Friend the Member for Hendon, South (Mr. Marshall) wishes to say. The hon. Gentleman may be right to make that observation, but he will not have heard either of the two contractors say that they are not dedicated to bringing about substantial service improvements. Mr. Brian Souter and those who manage Great Western Trains are quite clear that, even within the seven-year contract period, they can deliver substantial service enhancements which, so far at least, British Rail has failed to deliver.

Mr. Wilson: I do not accept that. In the Great Western Trains and South West Trains areas, British Rail has delivered rather good services. I will let the Minister's comment pass because I do not want to start a general debate about privatisation. But I notice a rapid shift in ground. I picked up the hon. Member for Hendon, South specifically on the subject of investment, because he referred to investment. I thought the Minister might say that there would be no new trains on the underground if it were privatised, but that there will be investment in tracks, tunnels, bridges and the infrastructure. If he had said that, I would have said that, with many fanfares of trumpets, Railtrack has produced a 10-year investment plan that actually envisages less investment than has been provided in the past 10 years. However, I will leave that point for another time.

Mr. John Marshall: I met Mr. Brian Souter of South West Trains at the Confederation of Passenger Transport dinner and I spoke to him about investment and how privatisation was going. He said that when he took over the franchise, he was told that a relatively modest investment would improve the reliability of service. He asked how much it would cost and he told the individuals concerned to go ahead. They said that they had been trying to get the investment for 18 months under British Rail and they had got it in less than 18 days from South West Trains. Mr. Brian Souter has invested in improving the quality of the service, and the hon. Gentleman is wrong to denigrate him as he does.

Mr. Wilson: That sounds like a rather partisan account of the conversation between the hon. Gentleman and Mr. Souter. The hon. Gentleman extolled the virtues of privatising London Underground on the specific ground that it would bring investment in rolling stock. I pointed out, inconveniently for the hon. Gentleman, that the franchisees in rail privatisation have gone on record as saying that they will not invest in rolling stock. Incidentally, The Independent today reports that, after the first month's operation of South West Trains and Great Western Trains, there has already been a decline in time


keeping. That will not matter to Conservative Members because they are interested not in time keeping or the effects on passengers, but in the dogma of privatisation.

Ms Glenda Jackson: My hon. Friend will be aware that a Conservative think tank—in 1994, I believe—floated the idea of the privatisation of London Underground. The improvement in services for Londoners contained in that document was a reduction in the network of almost two thirds. The document also suggested that one way to raise the necessary funding for investment would be to offer for sale the names of existing London Underground stations. For example, it was suggested that perhaps Harrods would like to bid to change the name of Knightsbridge station to Harrods. Although the Minister has argued fairly forcefully that the Government are not attempting to privatise London Underground, the idea has been floating around in the Conservative party for some years.

Mr. Wilson: My hon. Friend is right. I always think that "Conservative think tank" is a contradiction in terms, but her general point is perfectly accurate.
I accept the spirit of the Minister's assurances today, but I must point out that he is an old lag. He has made comments on the subject before that were not in line with what he has said today. The Evening Standard article, to which I referred earlier, states:
Just over two years ago Steven Norris, London's minister for transport, in an interview with the Evening Standard, described franchises"—
in the context of London Underground—
as 'just pure common sense.' At the time Mr. Norris said: `Franchises could be offered on line-by-line basis. That is a concept we have clearly got to examine.'
One does not have to be paranoid—having read those quotations, considered the history and, indeed, listened to the comments from Tory Members this afternoon—to suspect that even in this apparently innocuous or constructive Bill all might not be quite as it seems. The not very cleverly hidden agenda is the privatisation of London Underground.
I would have thought that by now even the tiny band of zealots assembled on the Tory Benches this afternoon might show some restraint in so uncritically singing the praises of the railway franchising concept, because it is certainly not proving very popular in public opinion. The Minister is on the record as supporting the principle of franchising London Underground services and privatising the whole system. Even more importantly—if that is possible—the Deputy Prime Minister has come straight out and said that he wants to see the privatisation of London Underground in the next Tory manifesto. The gaggle of Tory Members of Parliament from whom we have heard today are all clearly committed to the privatisation of London Underground. So we are entitled to inspect the Bill closely and we will do that this afternoon and again in Committee.
I might as well lay down a marker. We will resist and we will prevent the privatisation of London Underground this side of a general election. The Minister, voluntarily, will not be in the House thereafter, but the people who want to privatise everything that provides a worthwhile public service in this society will not be in government to fulfil those ambitions.
I do not want to get into a general argument about privatisation, but I despise the way in which public service is denigrated in the House. The Tories can make some


claims on behalf of some privatisations. They can point to British Airways as a success story and to the success of British Telecom, although it would have been successful anyway and it probably would not have shed so many jobs in the process. But the idea, which Conservative Members propagate, that everything in the public sector was a failure and a burden on the taxpayer is so mendacious as to require correction. For example, British Airways is now a profitable and successful airline, but when it was in the public sector it was also profitable. The electricity industry has never paid as much to the Exchequer in tax as it did prior to privatisation in profits. In the gas industry, the price of domestic gas has not yet returned to 1979 levels in spite of the fact that we are now self-sufficient in gas. In all these industries, the public sector did a good job for the country. It would behove Tory Members to recognise that, instead of getting caught up in their ideological obsession with denigrating everything in the public sector.

Mr. Norris: In 1979, the nationalised industries consumed just over £2 billion in public support; in 1994, they cumulatively paid more than £2.5 billion in corporation tax to the taxpayer. Does the hon. Gentleman accept that unarguable proposition?
Secondly. whatever the hon. Gentleman's view of the merits of British Airways, and of whether it would have made a profit if allowed to continue in the public sector, it was his colleagues who claimed that that privatisation would be a disaster. It has palpably not been a disaster, which is why we would claim the same success for the railways and other privatisations. That, surely, is the hon. Gentleman's real logical difficulty.

Mr. Wilson: If we were going to debate this in more detail, I would accept some of what the Minister says about British Airways. But I do not accept his more general point. What he says about what the public industries cost and now produce is straight out of the Conservative central office crib sheet. In fact, there were two heavy loss makers in the public sector: the coal and steel industries—

Mr. Deputy Speaker: Order. I have allowed hon. Members to stray rather wide with their examples, but now we should get back to the Bill.

Mr. Wilson: The public utilities used to put more money into the Treasury than they do now—that fact should not be forgotten. The analogy between British Airways and the railways, or London Underground, is false. British Airways was a profitable transport business. In this country as in every other, however, the railways require public subsidy. So the question of the railways is qualitatively different from any question attaching to previous privatisations. The only question is whether the public subsidies provided anyway by the taxpayer, in the private or public sector, are better spent on developing the industry and maximising the quality of public service or on funding the private profits of the operators.

Mr. Keith Hill: Is my hon. Friend aware of the findings of the Transport Select Committee, of which I am a member, that the consequences of the franchising system for the British taxpayer are an annual extra cost of £600 million? Does he agree that there is every reason to


believe that if London Underground were privatised, the burden on the taxpayer to sustain that privatisation would be similarly increased?

Mr. Wilson: My hon. Friend is of course right. The all-party Select Committee under the—not exactly Trotskyite—chairmanship of the hon. Member for Southend, East (Sir T. Taylor) reached the unanimous conclusion that privatisation would cost the taxpayer £600 million a year more for no extra services. If the Tories think that is good value for money, theirs can hardly claim to be the party of business.

Mr. Garnier: Can the hon. Gentleman spare us a few minutes to explain how he reconciles the two halves of his amendment? His party
welcomes the higher levels of investment
provided by the PFI, yet does not believe
that the privatisation of London Underground would be in the interests of London".
Can he explain the apparent inconsistency?

Mr. Wilson: We have heard a great deal about this brilliant lawyer who presumably collects large sums of money outside the Chamber for that quality of intervention. I am surprised to have to point out to him that the PFI, even under the Tories, is not synonymous with privatisation. There is no contradiction between a joint funding approach and public control—the public operation of a public asset.

Mr. Garnier: So the hon. Gentleman has no problem with this Bill?

Mr. Wilson: Do people pay the hon. and learned Gentleman for this kind of intervention? Does he win any cases? I do not understand his difficulty. Even the Minister was generous enough to point out that my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) realised that there are ways of getting private money into public projects so as to facilitate the public sector's operation and provide the private sector with returns. [HON. MEMBERS: "The right hon. Gentleman is a great man."' Indeed he is, as even the Minister, who appears to be demob happy, would agree. Such partnerships also create employment and accelerate the pace of investment in public projects. They are therefore wholly desirable.
Ever since I have taken an interest in these matters, Ministers—notably the right hon. Members for Henley and for South Norfolk (Mr. MacGregor), now known as the right hon. Member for Hill Samuel MacGregor—have stood at the Dispatch Box and said that it is impossible to get private money into public projects. They said that that was a naive approach to circumventing public spending rules. They said that it could not be done; a project had to be wholly private or wholly public. That was the Government's approach until recently. They are latecomers to the idea of public-private partnerships.
The problem is that, once converted, the Tories cannot get off the ideological hook. They cannot allow the public sector to remain in the driving seat. All the experience of the PFI so far shows that public-private partnerships

happen only when the ultimate commitment to the project remains in the public sector. Without that, the private sector will not accept the risk entailed in most of these projects. That is why I genuinely believe that there will be a great many of these projects under a Labour Government. We will not be hung up on insisting that an unreasonable degree of risk must be passed to the private sector. We will go for pragmatic arrangements that allow the private sector to do what it is good at and the public sector to do what it is good at. London Underground will benefit from that.

Mr. Stephen: Would we be mistaken if we concluded that the hon. Gentleman and his party have an ideological objection to privatisation?

Mr. Wilson: We have no such objection in principle. I have no wish to buy back the Carlisle pubs for British Rail. Over the years some things have passed into the public sector that should not be there and which can be better done in the private sector. But our residual antipathy, such as it is, to the idea that the private sector can do everything better than the public sector is as nothing compared with the hatred that Tory Members display towards the public sector, and compared with their obsessive, irrational and unsubstantiated belief that there is nothing that the public sector can do better on behalf of the taxpayer.
I say that the public sector can do some things better and more efficiently, in the social, environmental and economic interests of the wider community.

Mr. Norris: I support the hon. Gentleman's remarks, in that my right hon. Friend the Member for South Norfolk (Mr. MacGregor), the former Secretary of State, used to make that very point to the right hon. Member for Kingston upon Hull, East (Mr. Prescott) when he was Labour's transport spokesman. The one thing that the Government do better than the private sector is to borrow money at finer rates. The right hon. Gentleman continually proposed leasing, a concept that he identified to accelerate public investment. But the only consequence was to impose far greater costs on the Exchequer than it would have borne if the Government had invested the funds in the first place.
The hon. Gentleman has neglected to identify how the PFI works: the transfer of risk from the public to the private sector, together with the responsibility for operations, forces greater efficiencies and greater economies. That is not because the people involved are inherently superior—I readily concede that point to the hon. Gentleman—but simply because they have more financial muscle available to them.

Mr. Wilson: The Minister is more reasonable than some of his colleagues in that he enters the latter caveat. There are no absolutes in this. Of course, risk should be transferred to the private sector, but it is a matter of degree.
I return to London Underground and the Northern line project, which is in the process of going ahead under the PFI. ABB, the company that was to the fore in advocating the project and carrying it forward, and, ultimately, I argue, making it happen, eventually pulled out because of the degree of risk that the Government wished to


transfer to it. I recall that the value of residual assets was the stumbling point. As a result 700 people are unemployed. It also happened for GEC Alsthom, and the managing director left shortly afterwards. It will be interesting to know what the highest echelons of GEC Alsthom think about the level of risk that it has accepted on the Northern line project. It will be even more interesting to know whether the Government will get away with it a second time, as it is fairly well known in the industry that nobody else would have accepted the level of risk that was passed on to make the Northern line project happen. I note that the Minister does not deny that.
We are talking here about a matter of balance. We want the projects to happen. We are happy to facilitate a measure that will make them happen, but we do not want any form of back-door privatisation. Ministers cannot complain if we thoroughly test every word that they say on this subject, because the precedents and their public utterances on the subject have been very much in the direction of all-out privatisation.
I could continue with further cuttings that show that what the Government really have in mind for London Underground is privatisation. After I had got through the first few cuttings about the privatisation of London Underground, which I got from the Library today, I noticed that one was written by the crime correspondent of the London Evening Standard. I immediately thought that we were on to the LTS contract, but we shall pass on that. The Bill should include a clause, perhaps, that the public sector should not be defrauded by the private sector, but that is not Tory philosophy either.

Mr. Spearing: Before my hon. Friend leaves privatisation entirely, does he agree that although the Minister said that it was not his intention to let Wisconsin Central or its equivalent play a big part in the Central line in future—other Ministers may well allow it—the Bill permits large-scale contractorisation, which is not very different from privatisation, which we would not accept, because it would not be in the interests of a coherent London Transport railway system, which was created in the 1930s but is now in the process of being dismantled?

Mr. Wilson: My hon. Friend is absolutely right. We do not want the fragmentation of the London underground system any more than we wanted the fragmentation of the British railway system, which is now happening with such deleterious consequences.
I am told that all-out privatisation could take place under existing legislation and that the Bill will not make it technically more possible for privatisation to occur, and to some extent we have to be guided by what we are told in these matters. What is important, however, is the credibility of the assurances. That is what we are anxious to test tonight. I cannot find the notes on clauses, so I shall have to paraphrase. The Secretary of State says that there are no manpower implications in the Bill, but then linked to that the statement that manpower employed by London Underground Ltd. will decline as contractorisation increases. That is not exactly encouraging if that is the motivation that underlies the Bill.

Mr. Norris: This is an important point. The hon. Gentleman was generous enough to say that he did not have the notes on clauses in front of him, so I shall correct

a misapprehension that I know that he would not wish to leave the House with. The explanatory and financial memorandum says specifically:
The Bill will have no direct effect on public sector manpower, although the number of LRT employees will decline to the extent that more staff are transferred to contractors under Private Finance Initiative agreements.
That simply acknowledges that the number employed by LRT directly falls as those staff are transferred to PFI contractors. It is not in any respect a statement about numbers of staff overall.

Mr. Wilson: It is useful that the Minister put that on record. I put it on the record that we would prefer to see a directly employed work force under London Underground Ltd. with all the securities and conditions of service that that involves. In getting private money into these projects, there is no need to transfer the employees to separately established private companies. There is no necessary corollary between those two actions. I hope that the Minister recognises that.
Returning briefly to the provision of ticketing at Heathrow, I defer to my hon. Friend the Member for Newham, South (Mr. Spearing), who was good enough to point out to me that, 20 years ago, the Greater London council tried to get ticketing right at Heathrow. He suspects that it might have been more successful if the GLC were still operating it rather than the present quango. We all have a shared interest. I endorse what the Minister said and welcome his remarks that, as the entry point to this country, the provision of ticketing at Heathrow is a disgrace and that something should be done about it.
I have spoken for long enough—[Interruption.]—if that is possible. I could not help but think when I was doing my research that there used to be more interesting debates in the House. I noticed that, in 1862, means of traction were debated, and John Fowler, the engineer, was said to have envisaged that trains would be blown through an airtight tunnel, using giant compressors at each terminus. If we had that quality of debate now instead of mere political rhetoric, the nation would probably be better informed and better governed.
We have put down our markers. The tube and safety on it is of immense importance. If people did not realise before just what high risks are involved in running an underground system, the tragedy of King's Cross reminded them that it is not something with which to play politics. It is an immensely complex system that needs a high level of investment and maintenance. In so far as the Bill facilitates those ends, we will support it, but it is essential to point out that we do not want the same games to be played with London Underground in terms of fragmentation, franchising and privatisation that have taken place with British Rail.

Sir Sydney Chapman: I am grateful to be called early in the debate. I consider it a pleasure to follow the Front-Bench spokesmen. The hon. Member for Cunninghame, North (Mr. Wilson), who speaks for the Opposition, was courteous enough to tell me that he has to go to a meeting shortly. I shall not take that amiss. I enjoyed his speech very much. I did not agree with much of it, but he made his points in a balanced and, at times, amusing way.
I very much enjoyed the speech of my hon. Friend the Minister. I do not know whether he realises it, but he spoke for one hour and 21 minutes. It seemed—this is the greatest tribute that can be paid to anybody who speaks at length in the Chamber—to be only half an hour long. It probably was if the interventions are discounted. I shall not say that the hon. Member for Cunninghame, North spoke for only half an hour but that it seemed like twice that length, as that was not the case. I cannot match the eloquence of either, but I shall try to be a little more brief.
The Bill is essentially technical, conferring very limited powers. It is basically intended to encourage and increase capital investment in London Transport in general and London Underground in particular. I consider it right for London Transport's limited powers to be increased in the restricted sense in which the Bill increases them.
The Bill is also about private finance initiatives. My hon. Friend the Minister identified one of those initiatives, which is already—so to speak—in train: the Heathrow link. The British Airports Authority is to contribute £300 million in a partnership between the public and the private sector. I welcome that; I also welcome—this is nearer to my parochial home—the £400 million that is being in vested in new rolling stock on the Northern line. Many hon. Members on both sides of the House have encouraged that investment, including my hon. Friend the Member for Hendon, South (Mr. Marshall) and the hon. Members for Hampstead and Highgate (Ms Jackson), for Streatham (Mr. Hill), for Newham, South (Mr. Spearing) and for Ealing, Southall (Mr. Khabra), all of whom are in their places.
I am not sure whether I understood my hon. Friend the Minister correctly, but he gave the impression that the new rolling stock—which I prefer to call trains; the stock on the Northern line is certainly rolling at present—would not start to be introduced until the middle of next year. I was rather disappointed by that: I had hoped that the first trains would be introduced at the end of this year. Perhaps my hon. Friend will be able to reassure the House, later if not now. Certainly, we welcome the 100 or more trains that will come on to our local Northern line.
In addition to the private finance initiatives that have already been announced and are about to be implemented, my hon. Friend mentioned a further £750 million that will enable London Transport to invest in three further specific projects. First, it plans improvements to the communications system, which I gather involves an integrated radio network. I must confess that, as a product of the pre-computer age, I do not really understand these matters, but such a system is certainly needed.
Secondly, London Transport also proposes to improve the ticketing system, and that too is necessary. Hon. Members have mentioned arriving at Heathrow. I take the Northern line, rather than fly to Heathrow, to get to Westminster. I use the underground regularly. I have used it even more since I ceased to be a Minister. There are two types of automated ticket dispenser: there is the type that demands the exact price of the ticket, and the type that gives change. I have observed that, although there is rarely a queue at those machines, there is always a queue at the window and that it consists of people who do not have any change and, no doubt, a few who do not know how to use the automated machines. I do not believe that

the replacement of automated machines by any number of people would speed up the dispensing of tickets. I say that not for ideological reasons, but on the basis of observation at the sharp end.
Thirdly, there is a private finance initiative project to improve the power supply throughout the underground. It is entirely reasonable that the Bill should contain approval for electricity sub-stations in private ownership to be built on LT land. I see nothing wrong with that.
Let me make one of the few party political points that I shall make. I feel that it needs to be made. I welcome the Bill because it will encourage more private finance initiatives. I also welcome Labour's support for some of the projects that are already under way. The hon. Member for Hampstead and Highgate and I debated the matter on television a few months ago, when I re-entered that medium after six and a half years observing a vow of silence in the Government Whips Office. I believe that the private finance initiative is accepted on both sides of the House; that is certainly the message that I received from the hon. Member for Cunninghame, North.
We all look up suitable quotations not only from what we have said ourselves, but from what our political opponents have said. Let me draw Opposition Members' attention to what was said only six months ago by the hon. Member for Oxford, East (Mr. Smith), who I understand is one of the Labour party's economic spokesmen:
Alongside our corporate tax strategy is our widescale commitment to nurturing partnership between the public and private sector, particularly with regard to partnerships in infrastructure investment, putting old battles between public and private behind us.
That, I think, reflects the general view of hon. Members on both sides of the House.

Mr. Norris: Was it not also the hon. Member for Oxford, East (Mr. Smith)—who succeeded me in the second greatest constituency in England—who said that no alternative to the present Government could conceivably contemplate higher levels of public expenditure than those in which the Government were currently indulging? Does not that show very forcefully why the Bill is essential and, moreover, that Opposition Members could not possibly disagree with it?

Sir Sydney Chapman: My hon. Friend is absolutely right. Let me add that I hope that rumours that he will not be standing at the next election are without basis. Not only would that be a dreadful loss to the parliamentary Conservative party; the quality of debates in the House would take a tumble. I am sure that at least some Opposition Members share that sentiment. I can say very sincerely of my hon. Friend that he has a rare ability to speak at the Dispatch Box with authority and assurance while displaying no sign of arrogance. He also manages to speak confidently without showing any complacency. I pay due tribute to him.
The Bill is directly related to London Transport, mainly London Underground. It is therefore directly related to the Northern line. I should like to make a few comments about what my hon. Friend the Member for Hendon, South described eight years ago as an abominable system. The Northern line is indeed the misery line in the London Underground network, not only because it needs a good deal of investment but because it really consists of two separate lines.
Anyone who has studied the configuration of the line will know that one section goes from High Barnet in the north, via the City, to Waterloo and southwards, while the other section starts at Edgware, goes into the other spur at Camden Town and then proceeds southwards, via the west end and Waterloo. The line is rather like a chain, in that its strongest point is its weakest link—Camden Town, where the track is not sufficient to deal with the demand for services, especially during the rush hour.
I am told that, if the two parts of the line were separated, between 20 and 30 per cent. more traffic could use it. I suspect, however, that if they were separated—which I understand would cost billions of pounds—my constituents would complain when they wanted to go to the west end, just as the constituents of my hon. Friend the Member for Hendon, South would complain that they could not go directly to the City.
The Northern line is unique. For a considerable amount of its length—from, I think, East Finchley to Morden—it contains the longest tunnel in the world. Although that might be the proud boast of people who espouse the Northern line's cause, it results in its being probably the most unpopular line for employees in the London Transport network. I suggest that staff who work on the Northern line should be paid a premium, to try to ensure that more employees will agree to work on it. Although there may not be a shortage of employees on the London Underground system as a whole, there inevitably is a shortage on the Northern line.
I shall not bore the House by reminding it of some of the investment figures that I managed to glean from my hon. Friend the Minister in an intervention, but the problem facing London Underground has been caused by chronic underinvestment in the 1950s, 1960s and 1970s. It is hard for us to realise it but, until the late 1970s, planning for London Transport assumed that, each year, fewer people would use the system or, to be more precise, people would use the system on fewer occasions. That was partly to do with the great growth, during those three decades, of car ownership.
Suddenly, towards the end of the 1970s—when Labour and Conservative Governments were in power—it was realised that the chronic underinvestment had to be dealt with. In the 1970s, capital investment in London Underground averaged under £50 million a year. Between the end of 1979 and the beginning of the 1990s, it increased to more than £500 million a year. That does not include an additional £500 million of annual investment in the Jubilee line extension at present.

Mr. Keith Hill: I am deeply reluctant to labour a point that I have already made but, until the late 1960s, London Transport was under a statutory break-even requirement and, as the hon. Gentleman has conceded, its demand for central Government funding did not emerge until the late 1970s. It is bogus to draw comparisons between funding in the 1970s and in the current period as, in the 1970s, London Transport did not demand the same level of central Government subvention. I hope that the hon. Gentleman will agree that it is far more relevant to examine the decline in core investment in London Underground from £683 million in 1992–93 to—this is a revised estimate—some £380 million in 1997–98. That is a scandal and he must justify it.

Sir Sydney Chapman: I do not try to justify it because it is nowhere near the reality. I understand what the hon.
Gentleman says, but even if he were correct—which he is in technical terms—the vast increase in investment far outweighs those esoteric considerations. We could debate this all night, but most certainly will not.
In saying that investment has risen from under £50 million a year in the 1970s to more than £500 million a year in the 1990s, I exclude inflation. Allowing for inflation, but still excluding investment in the Jubilee line extension, a real comparison of those figures shows that we have quadrupled investment, but that is, perhaps, more an argument for the Committee stage of the Bill. I hesitate to say that only because I should like to assure the Government Whip on the Front Bench that that is not an invitation for me to be invited to join the Committee.
I am grateful for the House's indulgence. More and more investment is needed on the London Underground system. After the Government reached investment of £500 million a year, London Underground managers demanded that it should be £750 million a year. We would all like to wave our proverbial wands and to give more to London Underground.
That brings me back to the central point of the debate and of why we need the Bill. The taxpayer will, I hope—we cannot be certain about the future—put more and more into London Underground, year on year. Given the other priorities of public spending—pensioners at my constituency meetings do not put investment in London Underground ahead of the need to increase the state retirement pension—the only way that we can find the finance to secure the necessary investment in London Underground in the next decade is the private finance initiative. That is why I welcome the Bill.
The Bill is short. As my hon. Friend the Minister said, it has six clauses but, essentially, it has just three. It is technical but important and I commend it to the House.

Mr. Keith Hill: Despite the Minister's protests of injured innocence, my hon. Friend the Member for Cunninghame, North (Mr. Wilson) was clearly right to subject the Bill to his usual scathing analysis as it is a possible paving measure towards privatisation of London Underground.
Bitter experience has taught Labour Members that the Government are not always entirely transparent in their intentions on matters of privatisation. Like my hon. Friend, and also my hon. Friend the Member for Hampstead and Highgate (Ms Jackson), I spent many weeks on the Standing Committee that considered the Railways Bill in 1993. During that long consideration, did Ministers mention their intention to privatise Railtrack before the completion of the franchising process on British Rail? Did they mention even Railtrack's flotation?
It is not without reason, therefore, that we are suspicious of the Government's intentions—all the more so in this case. After all, there has hardly been an absence of smoke about the Government's preference for privatisation of the tube system. My hon. Friend the Member for Cunninghame, North referred to the story in early February in The Independent headlined:
Tory plan to sell off tube".
According to The Independent, that is one of the pet projects of the indefatigable First Secretary of State and viceroy of Henley—that is about the only title that he has


not yet assumed, and I hope that I have not planted the idea in his mind—for inclusion in the next Tory party manifesto.

Mr. Norris: My right hon. Friend the First Secretary of State will be reading the record of these proceedings.

Mr. Hill: Exactly—no doubt he will read the record assiduously on the morrow and we shall receive an announcement in due course.
The interesting thing about that story was that it was not ascribed just to the First Secretary of State. The Independent was able to find a number of London Conservative Members who were ready to justify the scheme, so it is hardly news to them. There is, as they say, no smoke without fire. Judging from Tory Members' interventions, the privateers are snapping at the Minister's heels, despite his disavowals. Frankly, as a London Labour Member of Parliament I am almost tempted to welcome any proposal for privatising the tube. After the chaos of rail privatisation, for the majority of Londoners the privatisation of the tube would be the final nail in the Government's coffin.
If the Minister and the Government mean what they say about the Bill having nothing to do with privatisation, they will not vote against Labour's reasoned amendment. If they do vote against it, Londoners will draw the obvious conclusion, which is that a sell-off of the tube is in the Government's sights. I just hope that Ministers are braced for the consequences.

Mr. Wilson: Does my hon. Friend agree that there is an exact parallel with rail privatisation? While Londoners, including my hon. Friend's constituents, are wholly opposed to any privatisation of the tube, they would be even more appalled by its possible fragmentation.

Mr. Hill: I am grateful to my hon. Friend for that intervention. He is right. The frightening thing is that the Tory think tank's favourite scheme is to sell all 10 London tube lines. It is a recipe for chaos and disaster for London's travelling public. When Londoners learn that Conservative Back Benchers, at least, are contemplating fragmentation of the tube, they will be even more pronounced in their reaction to the Bill.
I shall adopt a more charitable note and take the Minister at his stated intentions. If the Bill is simply devised in part, as the Minister has assured us, to permit London Underground to diversify its profit-making activities—for example, the fibre-optic cable scheme—I, for one, certainly have no objection. On the contrary, I am all for public sector companies engaging in profitable innovation. Many of the former nationalised utilities did so very successfully, which is why the Government were able to privatise them in due course. That sort of profit-making innovation is an entirely proper activity for a public sector company in a mixed economy. It is exactly the sort of freedom that the Labour party wants for the Post Office, but which the Government are consistently resisting.
If, in addition and as the Minister declared, the Bill is designed to facilitate London Regional Transport's participation in further private finance initiatives, I am all

for that, too. We welcomed the initial embrace of the private finance initiative concept in 1991 by the right hon. Member for Kingston upon Thames (Mr. Lamont), in his previous incarnation, and the subsequent, even warmer, embrace of the concept by the Chancellor of the Exchequer. Of course, Labour Members know that the true origins of the concept lie not in Kingston upon Thames but with my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). It is exactly the right sort of public-private partnership that we should be aiming for in British industry at the end of the 20th century.
It is also indisputably the case that the PFI has hardly been a roaring success under the Government, with only one fifth of authorised expenditure having been expended on schemes to date. That is why I have been impressed by the detailed thinking undertaken by the Labour Treasury team on this. I have read all the documents carefully. As the Member of Parliament who acted as secretary to the all-party Northern line group during the lengthy and tortuous negotiations on the Northern line PFI—which ultimately succeeded, much to the advantage of my constituents in Clapham and Balham—I appreciate Labour's new proposals on the PFI concept. For example, I appreciate the objectives of securing greater prioritisation among the PFIs, of achieving greater clarity in the terms on which the private sector should be required to submit tenders and how risk and returns are to be shared and, not least, of streamlining the decision-making process. I am also interested in Labour's newer thinking about mechanisms to insure private and public sectors against the risks involved in such projects.
The PFI offers the leverage of private sector borrowing because of the efficiency gains from private sector management of the projects, but it is important to recognise that it does not actually secure significant extra funding. PFIs can bring forward projects, but at the end of the day they still have to be paid for out of public funds—either out of enhanced revenues, as is anticipated with the Northern line PFI, or directly from the Exchequer. Nevertheless, where PFIs are possible, they are very much to be encouraged. The Bill is designed to facilitate PFIs associated with power supply on the underground and with a new ticketing system. I hope that there remains scope for further PFIs more directly concerned with infrastructure on the underground—rolling stock, track and signalling renewals and, perhaps, station development.
As the Minister has already said, PFIs will succeed only where there is a real profit incentive for the private sector. The truth is that much, if not most of the renewals still desperately needed on the underground relate to intrinsically loss-making infrastructure and services. It is obvious that investment in such areas should be the subject of direct Government expenditure; yet the blunt truth is that the Government have proved reluctant to fund more than, at most, 60 or 70 per cent. of the capital investment that London Underground has identified as necessary to create, in its words, "a decently modern metro".
That level of investment was set at £700 million by the Monopolies and Mergers Commission in 1991. Although I have seen subsequent disavowals that the Government ever accepted that figure as the correct level, the very fact that in 1991, the year of the report, the then Secretary of State for Transport convinced the Chancellor to increase investment to that precise level is persuasive enough proof that the Government knew that it was the right level.
The trouble was that that munificence extended for just 12 months. Having geared up to spend £683 million at 1995–96 prices on the core network in 1992–93, London Underground found its capital investment slashed by £150 million the following year. Since then, there has been a see-sawing in capital investment in the core network from one "Financial Statement" to the next—but, on the whole, there has been a distinct downward trend. There was £550 million for the core network in 1993–94, £546 million in 1994–95 and £549 million in 1995–96. Last year London Underground requested £581 million for 1996–97, but got £413 million. For the following two years to 1999, the equivalent projected sums are £383 million for each year.

Mr. Norris: Did the hon. Gentleman refer to grant or did he refer to investment? If he is referring to grant, he must acknowledge that to any grant provided must be added the very substantial internally generated investment by London Transport to give a total figure for what actually matters, which is investment in service. He will acknowledge that investment in the service is at a consistent all-time high.

Mr. Hill: I certainly accept that point, but I do not think that there is any point in having a partisan dispute. The Minister is absolutely right about the global figure for investment in the core network and the Jubilee line extension, about which I shall comment in a moment, and it would be foolish to challenge that assertion. It seems highly unsatisfactory, however, that the admirable efforts of London Transport to generate its own funding, which is running at £200 million a year, should be responsible for almost 40 per cent. of its capital investment funding. I doubt whether any public transport system in any major capital city in the western world has such a requirement for self-generated capital funding placed on it.

Mr. Garnier: So that I may understand the hon. Gentleman's point, can he say what level of direct grant he would propose if he were the Minister responsible for London Underground?

Mr. Hill: I will gladly do that. The hon. and learned Gentleman is anticipating my argument; if he will bear with me, I will come to his point.

Mr. Stephen: If a business has the ability to generate a substantial proportion of its own funds for investment, is there any reason in principle why it should not do so?

Mr. Hill: Absolutely not, but the essence of my argument is that there should not be such a heavy burden placed on self-generated funding in the overall capital programme. We ought to be innovative in our approach to possible funding for transport infrastructure programmes. Self-generated funding is one source. Central Government funding is another. Perhaps we should also be considering other sources, about which I shall comment. In principle, of course there is no objection to internally generated funds forming part of the capital programme.
I should like to make two points about the record of investment in London Underground over the past few years. First, the investment is inconsistent, and that is no way to run a railway. It is grossly unfair on policy makers in London Underground, who cannot construct reliable future

investment programmes against a backdrop of the see-sawing profile of central Government grant. It creates a demoralising climate of uncertainty in the company—hopes are raised for the implementation of projects and then subsequently dashed. Such uncertainty also creates its own dis-economies. Time and resources invested in developing projects are wasted when funding ceases abruptly. I am not recommending it, but it would have almost been better for planners at London Transport to have been guaranteed stability at a lower level than to suffer the slings and arrows of such inconstant fortune at the Government's hands.
Secondly, funding for the core network will approximately halve between 1993 and 1998. The original figure suggested by the Monopolies and Mergers Commission of £750 million at current prices was a realistic assessment of what is needed to develop a modestly improving metro system for our capital city. The Government and their successors ought to recognise their responsibility in that respect. I hope that that satisfies the hon. and learned Member for Harborough (Mr. Garnier). We are talking not about megabucks in this context but about making the difference between an underground system that is set on a process of slow decline and one which, in an unspectacular fashion, can continue to meet the needs of London as a working economy and a centre of tourism.
I should anticipate a further intervention by the hon. and learned Member for Harborough by hastily adding that, as a mere Back Bencher, someone of my humble status cannot possibly be construed as offering a spending pledge on behalf of Labour in the lead-up to the next election. I am talking as much to my hon. Friend the Member for Cunninghame, North as I am to the Government, who apparently have neither the will nor the time to make the necessary change, since they are so obviously on their way out, when I say that London nowadays is short-changed in the relationship between its contribution to the national economy and its share in investment in the Exchequer. It generates one fifth of the nation's wealth and gets back one seventh in Exchequer expenditure.
Of course, I accept the principle of redistribution—I do not suppose that I would be sitting on the Opposition Benches if I did not. There are great riches in London, but it also has the greatest reservoir of unemployed persons in the country. Half of the top 25 parliamentary constituencies with the highest level of unemployment are in London—one of them is mine. It is my firm belief that a new balance must be struck to correct the present distortion in the distribution of national wealth. Higher investment in London's transport infrastructure would be one means of doing that. I repeat my belief that such higher investment ought to be forthcoming from the Government and I express my hope that it will be from the next Labour Government.
In any circumstances, either as an alternative or, it is to be hoped, as a supplement to higher Government funding—to address the point to which I referred in response to the hon. Member for Shoreham (Mr. Stephen)—we ought to be ready to consider other sources of financing the London transport infrastructure, including the London underground.
For many years, a company levy has helped to develop Paris's massively impressive overground and underground railway system. Remarkably, that is exactly what is on offer from London's businesses as well. Almost six years ago,


in May 1990, the Corporation of London published its far-sighted report on London's transport, "A Plan to Protect the Future". That report contained a proposal for a supplement to the then unified business rate, to be earmarked for transport improvements in London.
The same plan has been taken up by the excellent London First group as part of its transport initiative. Its essential proposal is to invite businesses to vote on whether to contribute to a specific programme of investment in existing and new railway lines—overground and underground—in London. If that were agreed, the contribution would be collected through a surcharge on the national non-domestic rate. The potential of the scheme is obvious. A 10 per cent. addition to the NNDR would yield in London between £300 million and £400 million a year—more than enough to fill the gap between Exchequer funding and the needs of the core underground network.
I regret that Ministers have shilly-shallied about the proposal—I suppose that we can hope for no more—which I repeat has been on offer from London's businesses for almost six years. Ministers have raised concerns about expenditure being counted against the public sector borrowing requirement. As London First has pointed out, routes around the PSBR concept were devised for the community charge, for council tax and for grant-maintained schools, and a route ought also to be found to secure such a remarkable offer.

Mr. Stephen: The hon. Gentleman makes an interesting proposition. Does he accept that although most businesses do not mind paying tax on money that they have earned, they object to paying tax on money that they have not earned? The problem with non-domestic rates, as with national insurance contributions, is that they do not relate to a business's ability to pay.

Mr. Hill: That may or may not be the case. Let us suck it and see, test it out, put it on trial and ask businesses, as their representative organisation in London is inviting us to do.

Mr. Norris: I am grateful to the hon. Member for Streatham (Mr. Hill) for giving way, because I think that my hon. Friend the Member for Shoreham (Mr. Stephen) is making an extremely important point. I must tell the hon. Member for Streatham that government is about slightly more than sucking it and seeing, inviting though that prospect may be. [Interruption.] I do not see what the hon. Member for Lewisham, East (Mrs. Prentice) finds so risible.
If the hon. Member for Streatham suggests the notion of additional taxation for London's hard-pressed business community, and if he accepts the undeniable fact asserted by my hon. Friend the Member for Shoreham—that the national non-domestic rate takes no account of the profitability of an individual enterprise or of its ability to pay—precisely what has the hon. Member for Streatham sucked and seen that the rest of us do not know about? Will he enlighten us? Will he get away from all the hyperbole and vague arm wavings and give us some details of his scheme for a tax on London's businesses? For example, does he think that the small shopkeepers of Streatham would be happy to pay a tax to deliver crossrail? I should be interested if he can give us an answer.

Mr. Hill: Recoiling from that devastating intervention, I must point out that it is not for me to suck it and see in that

context. Notwithstanding the Minister's many claims to esteem in the House—many of us have already said that we regard him as an ornament to the Chamber—he will surely accept that both the Corporation of London, which produced a report on London's transport entitled, "A Plan to Protect the Future", and the London Pride Partnership, the representative organisation which incorporates businesses across the capital and is doing a wonderful job promoting London, have published reports in which they make precisely the proposal that I have described. Both those organisations say that the test should be to put the proposition to the businesses themselves. As representative organisations, they obviously have a strong suspicion that London businesses would say yes, because they want to put London first. London First is surely right to observe that if businesses are willing to contribute to transport investment, it would be
bizarre to veto a scheme which enables them to do so in an equitable way".
I earnestly hope that both the Government and my party will revisit that proposal, which has been on offer so long. It is a gift horse that it would be mad to kick in the teeth. That investment is desperately needed.

Mr. Garnier: Reverting to the hon. Gentleman's point about a London transport business tax, did he say what percentage the tax would be of a company's profits or turnover? If he did I missed it. Did he say which authority would levy the tax—a London Transport body, a local government body or central Government? What would be the consequences of the appeals system that would have to be set up to deal with any applications against any unfair levy of taxation that may be made by the body that he hopes to invent? Finally, what total sum does the hon. Gentleman hope that his new tax will raise? Would it be different from the £750 million that he mentioned earlier?

Mr. Hill: Those questions would be better put to the Corporation of London or to London First, because they devised the scheme.

Mr. Garnier: The hon. Gentleman is arguing in favour of the proposal.

Mr. Hill: I will give the hon. and learned Gentleman an example. It is estimated that a 10 per cent. supplement to the national non-domestic rate for London businesses would yield between £300 million and £400 million. I cannot dispute that figure as it appears in a document entitled, "Liberate the Tube", published by the Centre for Policy Studies, so it would appear to have the stamp of approval of one of the hon. and learned Gentleman's Conservative party think tanks. He might have a word with the CPS about the idea; I dare say that he is closer to it than I am.

Mr. Garnier: I would not mind asking—

Mr. Deputy Speaker: Order. Is the hon. Member for Streatham (Mr. Hill) giving way?

Mr. Hill: No. I have answered the hon. and learned Member perfectly adequately.
It is perfectly true, as the Minister has repeatedly told us, that capital investment in London is at an all-time high. However, almost half that capital expenditure is devoted


solely to the Jubilee line extension. I do not complain about the Jubilee line extension; I am all for new lines. In fact it would suit me if the Minister would here and now give the immediate go-ahead for an extension of the tube to Streatham. That was first promised in 1926, but we are still waiting for it 70 years on. What a wonderful millennium gift that would be for the people of Streatham. I would gladly give way to the Minister if he would make that offer now.
I would not complain about the Jubilee line extension, even if it showed the lowest cost-benefit analysis return of the four new rail projects identified by the 1986 central London rail study. I am sure that it will be a state-of-the-art underground line. But where is the advantage in adding a few miles of the most modern metro in the world to the remaining 250 miles of London underground which is falling into greater decay and dilapidation?
In my view, London Underground is doing a terrific job in keeping the network running, generating an annual £200 million of its own funds for investment and moving as swiftly as it can to capital renewal of the system, even if that makes life difficult at times for underground users. My daily journey to work now involves my negotiating both work on a new ticket hall at Brixton tube station and work on a new escalator at the interchange between the Victoria line and the District and Circle lines at Victoria, and then emerging at the industrial site here at Westminster.

Mr. Norris: When the hon. Gentleman asks where the advantage is to the rest of the tube system of developing the Jubilee line extension, he falls into the trap of assuming that new developments have no impact on the existing system. But of course they do. One of the key advantages of the Jubilee line extension is that it will take travellers from Stratford, for example, directly to the west end. Those people currently use the Central line; the hon. Gentleman will know that even after a £830 million improvement, overcrowding on the east-west flow of the Central line remains a key consideration. One of the greatest advantages of the Jubilee line extension is that it will alleviate pressure on a piece of the existing infrastructure.

Mr. Hill: Again, I accept the Minister's observation. In passenger traffic terms, he must be right. But it is still worth returning to my original question: is the advantage that he describes great enough to justify devoting half the current capital programme of London Underground to a relatively short extension?
The truth is that on its present funding, London Underground Ltd. cannot keep up with the cross-pressures of the backlog of years of underinvestment in the system, together with increasing passenger demand. London Underground can now take on only the most essential engineering upgrades on the unseen parts of the system—signalling, track, bridges, embankments, and so on.
The rising backlog of renewals is highly visible even on the other parts of the system—the parts that passengers see. It would be an education for the Minister to see the appallingly decayed Bakerloo-Northern line interchange at the Elephant and Castle, or to witness the cave-like condition of many of the stations on the City extension of the Northern line.
It has been rightly said—I owe this quotation to the fascinating document published by the Centre for Policy Studies—that

For many workers in London an underground station is the most dilapidated place they have to experience in their everyday lives.
No wonder so many of them prefer the modernity and convenience of the private car, and increasing car use will be the penalty for neglecting the underground.
This week the Department of the Environment's report, "Indicators of Sustainable Development for the United Kingdom", reminded us of the consequences of the continued supremacy of the great car economy in terms of higher energy consumption, congestion and declining air quality. The Government proclaim their commitment to reducing car dependency but systematically hack away at investment in our transport infrastructure—down 15 per cent. in real terms between 1991–92 and 1997–98. It is high time that the Government put their money where their mouth is, and they could make no better start than by significantly boosting their investment in the tube.

Mr. John Marshall: It is always a great pleasure to follow the hon. Member for Streatham (Mr. Hill) because he and I played an important role together in the all-party friends of the Northern line group, which helped to get the Northern line trains that will come on stream next year.
Of course, the hon. Member for Streatham displayed the irresponsibility that people in opposition enjoy.

Ms Clare Short: I hope that the hon. Gentleman will soon enjoy being in opposition.

Mr. Marshall: I have no desire to enjoy that irresponsibility, and do not intend to this century.
The hon. Member for Streatham said that a greater percentage of Government expenditure should be devoted to London, but—naturally—his hon. Friends the shadow Secretaries of State for Scotland and for Wales say that there should be more Government expenditure in Scotland and Wales, those who come from the north-east want the Government to spend more in the north-east and those who come from the north-west say that more should go to that region.

Mr. Keith Hill: I come from London, so let us agree on that.

Mr. Marshall: We believe in a better deal for London, but the proposals that the hon. Gentleman advocates would not help London.
The hon. Member for Streatham spoke about an employment tax in London. Such a tax would help destroy jobs in London. London First may support the idea, but I remind the hon. Gentleman that the leading light behind London First is Lord Sheppard of Didgemere, from Grand Metropolitan. If one is part of a big multinational company, one is likely to be able to afford an employment tax in London, but if one asked small shopkeepers, who are struggling, or the small business man who employs two or three people, whether they wanted an employment tax in London, they would say no. Many official organisations that claim to be representatives of industry or commerce or farmers and so on are not representative of the opinions of many of those people.

Ms Glenda Jackson: My hon. Friend the Member for Streatham (Mr. Hill) did not refer to an employment tax.
He referred to the idea, which has been presented by the transport initiative of London First, of businesses agreeing to pay to improve London's transport. The London chamber of commerce and the Confederation of British Industry are participating in that London transport initiative. Were it not for the fact that I know interventions must be short, I should read the whole list.

Mr. Marshall: Most people would regard a payment made by industry to a central fund as a tax. It is all very well for the hon. Lady to indulge in semantics, but that is how most people would view it. If they looked at their budget and found that there was a payment "to improving London Transport", they would regard that as a tax, which would reduce their profitability and might put some of them in queer street.
The point that I was trying to make before the hon. Lady asked me to give way was that some of those organisations are not representative of individual companies. I am sure that the Whip on duty, my hon. Friend the Member for Stroud (Mr. Knapman), will have sympathy with the story that I am about to tell. In October 1990, when I was in Scotland, talking to some fanners, the farmers asked me, "Can you try to prevent us joining the exchange rate mechanism?" I said, "I have a lot of sympathy with your point of view"—as I suspect that my hon. Friend the Member for Stroud would—"but unfortunately the National Farmers Union, which seeks to represent the farmers of the country, is telling the Government that they should do it, and do it now."
Those farmers were right; the NFU was wrong. Often organisations such as the Confederation of British Industry, which are run by large companies, which say that they are representative of industry, are not representative of small firms, which lack the time or inclination to send their major directors to interminable meetings to express their views. London First is not representative of industry; it is representative of its members, and they are not representative of every employer in this great capital.
There is a tradition that, when one speaks in a debate, one declares one's interests. The first interest I wish to declare is that, like my hon. Friend the Member for Cumbernauld and Kilsyth (Mr. Hogg), I am an adviser to the Confederation of Passenger Transport. There is an historic symmetry in that appointment because, when I was convenor of the municipal transport committee in Aberdeen, my socialist shadow was the then Councillor Norman Hogg, the father of my hon. Friend the Member for Cumbernauld and Kilsyth. I am also, as the hon. Member for Streatham knows, chairman of the all-party friends of the Northern line group—friends of the Northern line not as it is, but as it should be, and as it will be next year.
Importantly, I travel by the Northern line and other routes on the London Underground. I can boast that I have asked more questions about London Underground than any colleague and made more speeches about it than any colleague—sometimes at anti-social hours.
Interestingly, early in his speech the Minister spoke about London Buses, which demonstrates some of the advantages of the Government's policy of using private management in transport. When London Buses started a

franchise programme under which routes were put out to tender, there were substantial savings—I believe of more than 10 per cent.—in running costs, Spanish practices were eliminated and efficiency became the name of the game. When London Buses was sold to the private sector, one of the advantages to London Underground was that part of the capital received was reinvested in the underground to improve the quality of service.
Reference was made to the history of London Regional Transport, and to the fact that, between 1969 and 1984, it was the responsibility of the Greater London council. My right hon. Friend the Secretary of State for Transport, who is on the Treasury Bench, was a member of that august body. I remember that when he gave a speech in the constituency of Ealing, Acton, someone asked, "What have you learnt since you became a member of the Greater London council?" and my right hon. Friend answered, "I have learnt not to admit that I am a member of the Greater London council."
That is understandable if one considers the way in which the Greater London council handled London Underground. London Underground's worst years—the locust years—were the Livingstone years, when emphasis was placed on cheap fares, not capital investment to improve the quality of service.

Ms Glenda Jackson: The hon. Gentleman is talking about the Fares Fair period of London Underground's history, when passenger numbers increased by 16 per cent. and road accidents—there is always a benefit—decreased by 3,500.

Mr. Marshall: Although of course the number of passengers increased, the problem with the policy was that, simultaneously, capital investment in maintaining and improving the service was held down. The Greater London council should have invested in improving the service, not in lowering fares. It is remarkable that Opposition Members who talk about the level of past investment—

Mr. Keith Hill: The hon. Gentleman asserted that investment in London Underground declined during the years of the Fares Fair scheme. My recollection is that that scheme operated from between approximately 1980 and 1984. He should therefore be interested to learn that, in 1980, investment in London Underground was £78 million. In 1981, it rose to £91 million; it decreased to £82 million in 1982; it increased to £110 million in 1983; and it ended up at £147 million in 1984. That does not sound like a reduction in investment in London Underground, as a penalty for the Fares Fair experiment.

Mr. Marshall: I was trying to say—I thought it was obvious even to some Labour Members—that the GLC clearly had a choice about how to spend money, and it chose to spend it keeping fares down rather than investing in the future. It is illogical that Labour Members, who are the spiritual successors to that body, should come forward in this debate and complain about past investment in London Underground, particularly as public transport in London is being transformed.
We have discussed the Jubilee line extension. I was somewhat surprised to hear the hon. Member for Streatham complain about that massive improvement in public transport in London, which will benefit not only the


economies of the areas in which the line will be extended, but passengers across the capital because it will take some passengers away from present routes.
There have been improvements to public transport in docklands. Earlier in the debate, we heard about the position at Heathrow, and the fact that the Paddington-Heathrow link will cut that journey time by about 12 minutes. That is a £300 million investment that has been provided substantially by the British Airports Authority.
The Northern line will be transformed. I am sure we can get cross-party agreement on the fact that, for years, it was the misery line in London. The misery line will be transformed into the most modern line in London. Many of the trains currently on that line date back to 1959. That year was a particularly good vintage in political terms, and let us hope that the trains that are coming in 1997 will have an equally good political vintage.
Some hon. Members may have noticed the announcement in the press this morning about
London trams to return in £160 million deal".
We have been discussing the role of the private sector in funding new developments in London, and it is significant to examine who is funding most of that scheme. It includes groups such as Bombardier Eurorail, Sir Robert McAlpine, Amec Construction, the Royal Bank of Scotland and Centrewest, a bus operator. Three quarters of the project is being funded not by my right hon. Friend the Secretary of State and his Department but directly by private enterprise. Surely that demonstrates that the private sector is willing to come in and produce a better service for our constituents in London.
It is appropriate at this stage, although in his absence, to pay tribute to my hon. Friend the Member for Epping Forest (Mr. Norris), who has been the first Minister for Transport in London. He has been a very effective Minister and there is a feeling of regret on both sides of the House that he will not be seeking re-election at the next general election. I think that people would give him the advice that was given to another politician: resign, retire, return. Many of us hope that he will return to grace our debates and to prove once again what an effective operator he is as a Minister of the Crown.
We have discussed the LU Northern line on many occasions in the House. I have explained that the trains are very old and that they are graffiti-ridden. There is so much graffiti on the trains that some of it is now two, three or even five years old. There is nothing more miserable than standing at a station at 7.10 in the morning and seeing a miserable, grey train coming in. We can only look forward to the day next year when we will see bright red and blue trains coming in that will lift our spirits.

Mr. Stephen: They will probably be covered in graffiti.

Mr. Marshall: They certainly will not be covered in grafiti, as my hon. Friend has said, because the new trains will be much more graffiti-resistant. It will be very much easier to get graffiti off in the future.
Graffiti is not the only problem with the LU Northern line. The dot-matrix system, which is called an information system, all too often is a misinformation system. Stations are tatty and they need improvement. That is why I welcome the Northern line's £1 billion regeneration, which is, of course, due solely to the PFI.

Ms Short: The proposal to have public-private partnerships to get more investment into transport was proposed by the Labour party long before the Conservative party moved to pick up that policy.

Mr. Marshall: It is very amusing to hear the Labour party claiming parentage of the PFI, because it seems that, whenever it is proposed, Labour Members criticise it. Those hon. Members who were in the Chamber yesterday for Health questions will remember what happened. Did the hon. Member for Halifax (Mrs. Mahon) welcome the PFI? Of course she did not; she criticised it. There was even an interruption by the hon. Member for Peckham (Ms Harman), who was, no doubt, seeking to re-establish her socialist credentials. She was critical of the PFI. It sticks in the gullets of most Conservative Members to hear Labour Members come along and claim parentage of the PFI, when they have been completely scathing about every attempt to get private finance into improving the health service, education or transport. They cannot have it both ways.

Ms Short: I wonder if the hon. Gentleman has talked to anyone who has been involved in bidding under the PFI? If he does, he will find that many companies that have been involved in PFI bids are very critical about how it is structured at present.

Mr. Marshall: I know that BT, once it decided that the Labour party was a soft touch, thought that it would be rather fun to negotiate with the Labour party. Last October, it turned out that the Labour party was a soft touch and that it gave BT everything that it wanted.
People recognise that if one is bidding under the PFI, it is the Government's duty to get the best possible terms for the taxpayer, for the consumer and for the future of this country. It is quite wrong for politicians to stand up, as the hon. Lady has done, and say, "We will be a soft touch. We will let bidders get what they want." Surely that is not what government is about. The Minister should not be about signing the cheque that GEC wants. I am surprised at the hon. Lady saying that a Labour Government would give big business what it wants, and that this wicked Tory Government are being too tough on big companies.

Ms Short: Obviously the hon. Gentleman has not talked to people who have bid under the PFI. If the public sector asks the private sector to carry inappropriate risk, one problem is that the capital is attained at very great expense to the public purse. If we reorganise the PFI to distribute risk properly—properly hold the risk that belongs in the public sector with the public sector and get the private sector to take appropriate risk—we will get cheaper capital, which will be cheaper for the public sector.

Mr. Marshall: I am surprised at the hon. Lady. She has come to the House and, in effect, said, "The Labour party would like to be a soft touch. We would like to give GEC a little more of what it wants, and we would like to take more of the risk." She is obviously listening to the moans of poor GEC.
The idea is that poor Lord Weinstock is having to take more of the risk than he wants. Of course Lord Weinstock will be allocated more of the risk than he wants—after all, he wants the public sector to take all of it and GEC to take


none. The hon. Member for Birmingham, Ladywood (Ms Short), despite her left-wing credentials—I think she used to write for Tribune—has now revealed that she will visit poor Lord Weinstock in the other place to say, "When I am Secretary of State for Transport I will have a cosy party with you and Lord Prior, you can tell us the amount of risk that you want the Labour party to take, and we will take it." I never thought that I would hear the hon. Lady say, "I am the friend of GEC. These wicked Tories are the friend of the taxpayer. They want GEC to take the risk, but I would like the taxpayer to take it." I am amazed that the hon. Lady has come forward as the friend of the capitalist rather than of the taxpayer. Long may we witness conversions from the left wing of the Labour party—it is a badge of honour to be worn by the hon. Lady. I have made my point even if it took two or three interventions from the hon. Lady to do so.
The hon. Member for Ladywood is right that GEC has taken on risks for the Northern line which are currently borne by the taxpayer. She will also be aware that the principle governing the scheme into which GEC has entered is, "No train, no pay." On those days when a train comes along with the slogan "Not in service", which happens quite frequently at the moment, GEC will not be paid. Under the PFI, there is therefore every incentive for GEC to ensure that trains turn up. That is why it is currently investing £23 million in upgrading the Morden and Golders Green depots. That programme will safeguard the jobs of my constituents. Just as important, however, it will guarantee that those who travel on the Northern line will be given a good-quality service, which will enjoy decent maintenance. As my hon. Friend the Minister for Transport in London said earlier this week, half the current delays on the Northern line are caused by faulty maintenance.
I was somewhat surprised by the comments of the hon. Member for Cunninghame, North (Mr. Wilson), who said that ABB had withdrawn from the negotiations for the Northern line tender. The hon. Member for Ladywood may not be aware that I have spoken to representatives of that company many times and they told me that they submitted a tender. The company certainly did not retreat from the negotiations in the manner suggested by the hon. Member for Cunninghame, North.
The Northern line is being regenerated because of the PFI. I have frequently discussed that line in the House and invited Ministers to travel on it. I was rather surprised by the hon. Member for Streatham, who asked how often the Minister for Transport in London had seen the Northern line at work. My hon. Friend has travelled on that line with me on a number of occasions and seen for himself the practical problems created by it.
We know that the Northern line's modernisation would not have occurred without the PFI and I believe that there is even greater scope for its application to other parts of London Underground.
Only this week we have witnessed the schizophrenic attitude of the Opposition to the PFI. The right hon. Member for Sedgefield (Mr. Blair) and the hon. Member for Dunfermline, East (Mr. Brown) welcome it, as does the hon. Member for Ladywood, who now says that she will be kinder to those private companies than the Government. We are aware, however, that the unofficial leader of the Opposition, the hon. Member for Bolsover

(Mr. Skinner), the hon. Member for Halifax and other Opposition Members have criticised the PFI time after time.
I am also surprised at the attitude of some hon. Members to the modernisation of the Northern line. I welcome that as a Member representing a constituency served by the Northern line and as a passenger on it. That is why I was surprised by the comments on Monday from the hon. Member for Hampstead and Highgate, (Ms Jackson). Instead of welcoming the proposed improvements, she concentrated solely on the short-term difficulties caused by the brief closure of parts of the route later in the year. I am sure that everyone understands that when a railway system is modernised, it is sometimes necessary to close the track in order to improve its quality so that, in future, that track will not have to be closed and trains can run more effectively on it.
Such modernisation reveals why we should look to the future. In the next Parliament I hope that measures will be taken to transfer London Underground to the private sector. It is illogical for certain hon. Members to say in speech after speech that London Underground has received inadequate investment and then to say that it should not be transferred to the private sector. They suggest that public ownership has failed London Underground, but argue that that means that it must not be transferred to the private sector. I am appalled that those hon. Members advance such an illogical argument.
I believe that the privatisation of London Underground would improve the quality of service and the efficiency of operation and increase levels of investment. That is in the interests of London, Londoners, all those who work in our great capital city and the many millions of tourists who come here for enjoyment. I hope that that privatisation will take place. I apologise to hon. Members for the length of my speech, in part due to the fact that I gave way every time I was asked to do so.

Mr. David Chidgey: May I add my congratulations to the Minister on his speech? We all enjoyed his bravura and generosity. It seems that, as the weeks go by, the shackles of office slip ever further from his shoulders. His free spirit fills the Chamber and adds a greater dimension to it. I for one am sad at the thought of him not being with us in the next Parliament.
The subject of the debate, the London Regional Transport Bill, seems to have been shunted into a side turning somewhere along the line in the past hour or so. At first sight, the Bill seems to be an innocent, almost pedestrian affair, as the Minister suggested. It has a mere six clauses, and is designed to tidy up the London Regional Transport Act 1984. It will allow LRT to do a number of sensible things to facilitate PFI projects connected with London Underground's power supplies; the introduction of smart card technology in the ticketing system; the exploitation of London Underground's fibre-optic cable network; and the extension of the east London lines. Those are sensible, sound ideas.
Within that simple, three-page Bill, however, lies a potentially powerful weapon about which many hon. Members have already expressed concern. It is rather like a snake in the grass—the smaller the creature, the more lethal its venom. The terms of clause 3 are so vague and so widely drawn that they give Ministers potentially


all-embracing powers to direct London Underground to do whatever those Ministers may wish. The Minister gave us a firm undertaking that that was not the Bill's intention, but, as he knows, and is so aptly demonstrating, undertakings, like Ministers, have a habit of coming and going.
In that context, the House will recall that the Railways Bill made no mention of the privatisation of Railtrack. On the basis of that legislation, however, the Government have found the means to pursue what I believe to be their ill-founded plans to privatise Railtrack without any further reference to the House. It would be unacceptable for the Bill to pass through the House in a form that would enable Ministers to privatise London Underground through a statutory instrument. I shall return to that later.
I shall deal with what is purported to be the Bill's main thrust: facilitating the PFI for capital projects to enhance London's passenger transport system. There is a danger of the Government being seduced by the idea that the PFI can be used to fund any public project or service, while hiving off all risks and responsibilities to private contractors. The concept of the PFI must be one of partnership between the public and private sectors.
If the PH is to be a success, the Government must heed the warnings of the private sector, the banking sector and experts in financial management and the management of large assets. They are not contractors trying to make an extra bob, but people with responsible views on how best to finance and run the country's major institutions and engines. They argue that they suffer high costs from the tendering process.
Every negotiation for a PFI contract is treated as a unique contract. There is a desperate need for the Government to find ways of standardising the PFI process by introducing standard specifications and conditions, making the system more efficient, transparent and easily followed, and allowing negotiations and contracting to be made easier.
There must be a sensible distribution of risk. We have to recognise that, with the extended contract periods of the PFI arrangements, which can be for 20 or 30 years, there must be increased uncertainty about the responsibilities and the risks associated with them. With major project contracts, it has always been the case that there should be a clause to deal with force majeure. Over a period as long as 20 or 30 years, is not a change of Government or policy a force majeure that no contractor can foresee or take account of when assessing the risk? We must recognise that, when question marks are put into such contracts, the price immediately increases. The price to the taxpayer increases, not the profit to the contractor.
The message from the people, firms and organisations engaged in PFI contracts is that we need, through Government, to build and retain expertise in how to operate the PFI system. There is a clear case for taking the PFI out of the hands of the Treasury, which is understandably, and rightly, primarily concerned with cost-cutting and expenditure control. That is its function. The PFI' s main contribution should be to increase investment, not to decrease the public sector borrowing requirement.
The Government appear to believe that public and private partnerships are an ingenious way of removing their more onerous responsibilities, while continually trying to place the majority of the risk on the private sector. It is hardly surprising that the companies that have

become involved in the PFI understandably expect a higher return on investment to cover the higher risks. The Treasury has little understanding of the ethos of the private sector. There is a clear case—I would welcome a comment from the Minister—for considering a separate agency to deal with the PFI and build experience, expertise and confidence with the private sector.
It is worth remembering that the PFI was launched to provide additionality to public expenditure. It was to provide the means to fund projects that the public sector had difficulty in funding. In practice, it is being used more and more as a substitute for public expenditure. A good example is the channel tunnel rail link, which shows how Governments can abdicate their responsibility to provide timely financial backing for projects that are essential to the public good.
The Government are so anxious to grasp the short-term advantage of the PFI that they are failing to recognise and support the genuine opportunities to develop public and private sector partnerships to invest in London's transport system. Hon. Members have drawn the House's attention to the London First initiative, and there was some debate about the benefits of its proposals. It is important to bear it in mind that that is an initiative from the people of London to provide and develop an imaginative transport programme to take us to the year 2010, by combining public and private funding to develop a partnership and proposals for a transport infrastructure fund.
There was much debate about the assumed unfairness of big business imposing on small business a requirement for what some regard as a tax and what others might call a contribution to improving London's transport system. It is important to remember that London First's initiative talks about the business community being asked to decide whether it would support such a scheme through a surcharge on the non-domestic rate. That means the whole business community, not only the chambers of commerce or the CBI. That is a democratic process—something that we should recognise and encourage.
London First has proposed another initiative that the House and the Government should examine as a worthy way of helping to fund London's transport. It has proposals for raising revenue through congestion charging, with revenue being directed solely to improving London's transport system. Before hon. Members get into a state and say, "This is more taxation, more burdens on the taxpayer," both surcharges—or additional contributions through the business rate—and congestion charging are not merely ideas but in place and working very well.

Mr. Peter Bottomley: I am sorry that I will not be able to stay for the whole of the hon. Gentleman's speech. Will he reflect on what level of congestion charging would have achieved what the changed traffic arrangements in the City did, or would have left Oxford street as it is now, with private cars banned and pedestrians still able to walk faster than taxis or buses? Are they to be charged?

Mr. Chidgey: I am grateful to the hon. Gentleman for taking me back 25 years to when I was involved in the pedestrianisation of Oxford street. The reaction from businesses and major hotels to the horrendous effect that stopping cars from driving by and parking outside their front doors would have on their businesses was amazing. A quarter of a century later, we have found that freeing major London streets from cars improves both business and the quality of life.
The level of charging for congestion or for using valuable road space in city centres has been established in cities throughout the world, from Singapore to Oslo. Throughout the western world, there are examples of how we could regulate access charges to valuable and much sought after road space in city centres.
Those ideas are not new; they are in place. They have been tried and tested and found to work. As usual, we hide and cringe from any innovation and let the Treasury damp down any enthusiasm by claiming that any such expenditure or fund raising would count as part of the PSBR.
To return to the PFI, which is the skeleton of the Bill, the PFI' s main contribution should be to increase investment, not to decrease the PSBR. We must generate public and private partnerships that are mutually beneficial. I put it to the Minister that the Government should try to use the PFI as a source of front-end expenditure. The Government should try to lever in private capital, at the same time recognising that they should assume many of the risks that are primarily their responsibility. Long-term investment in transport and other essential services is too important to be left to the vagaries of the electoral cycle. The PFI offers an opportunity to escape from short-termism, and, through its devolution, to afford people more control over the development of their communities.
The Bill offers an opportunity to address London's key transport issues. By definition, London is the hub of much of Britain's transport system. London's transport policy is a concern not just for Londoners, but for those who live in the south-east of England and across the United Kingdom. The powers in the Bill could be used to pursue the essential aims not only of transport in London but of the transport system as a whole. The essential aims of London transport should be to improve the transport services, to maximise co-ordination and integration of existing services, and to improve accessibility to transport services for all those who live or work in London or who travel through the city.
We must ensure that there are safe, affordable and efficient links within and between all London's communities and transport terminals. We must protect London's environment and avoid the imposition of further environmental burdens on the south-east. Improvements in London transport will contribute to securing a more dynamic, efficient and sustainable economy.
I believe that the most effective means of implementing an integrated transport policy for London—such as I am outlining—would be through the establishment of a strategic transport authority for London. It would have the power to co-ordinate transport needs, encourage and support integration of services across the region, and provide Londoners with an effective voice on transport and land-use planning. Does the Minister recognise those key aims and objectives for London's transport? What role does he envisage for London Regional Transport in achieving those aims and objectives, with the benefit of the powers that it will acquire under the Bill?
In addressing the future of London's underground and rail networks, it is clear that a key aim must be the development of a co-ordinated and integrated system. We should not see piecemeal development that is dictated by the drive to maximise profits for a particular operator

in a particular area: rail and underground services must operate and be available to passengers as a complete network. Investment must be available in order to raise standards across the network and improve the reliability and frequency of services. Passengers' interests must be the prime consideration, and the underground, bus and rail networks must be marketed as a total service underpinned by the travelcard system.
There is much evidence of the dismal failure to meet those aims and objectives. The Minister recognises that neglect of investment in the London underground system has led to the closure of the Bakerloo line and Northern line tunnels. He claimed that that was inevitable because of the passage of time. However, I believe that postponing investment in maintenance has magnified the scale of the necessary repair works, with traumatic consequences for millions of people who travel, live and work in London.
I do not blame the Minister for that situation, and I thank him for his earlier comments in recognising my fellowship of the Institution of Civil Engineers. I congratulate him in return on being awarded a companionship of that institution.

Ms Glenda Jackson: Congratulations.

Mr. Chidgey: It is indeed a high and exclusive honour—unlike so many honours that Conservative Members attain for their services to this place. I am sure that the Minister will take pride in that award for many years to come—whatever other honours may come his way as a result of his ministerial position.
As a companion of the Institution of Civil Engineers, the Minister will move in different circles, and meet the great men of engineering who visualise and plan major projects. Through talking to them, he must know that there were other ways of dealing with the problems presented by the Bakerloo and Northern lines, rather than forcing their closure for 18 months in the capital city. I do not expect the Minister to respond to that point now, but he may do so in a few months, following further conversations with my friends and colleagues.
The postponement of the Thameslink project to 2006, and the fact that there is no clear commitment to crossrail—the interchange for Thameslink and crossrail has not been constructed at Farringdon—are examples of the failure to plan and introduce proper transport infrastructure for London. The Minister may not be aware that the inability to reach a decision and the delays on that project are jeopardising the key project design and planning team, which is threatened with redundancy. That would be a tremendous loss to the impetus and progress of the scheme, as the team's skills are not easily replaced. They must be retained, and the project must be seen to go forward.
Will the Bill promote and strengthen an integrated, co-ordinated public transport system for London, or will it result in a fragmented free-for-all? Will the powers granted under the Bill enable Ministers to pave the way for the privatisation of London Underground? The Minister said earlier that that was not his intention, and I accept his word, but time moves on. Does the Bill provide an opportunity for privatising London Underground and fragmenting what must be an essentially integrated transport system?
It is interesting to hear Conservative Members' comments about privatisation, but privatising London Underground piecemeal would clearly prejudice


passengers' ability to transfer between the various lines at some 50 interchange stations in the network. The concept of passengers being unable to move between lines to complete their journeys is incomprehensible. Journeys across London would be made immeasurably more difficult, and the essential unified management of the station interchanges would be destroyed. Such unity is essential in order to maintain public safety in the event of an accident, such as the King's Cross tragedy.
I believe that the Bill must be redrafted to contain the clear and unequivocal statement that it will give Ministers no powers to privatise London Underground. Any such powers must be the subject of fresh, primary legislation—which the Liberal Democrats would oppose vigorously should it ever come before the House.

Mr. Edward Garnier: I am grateful to be called to speak in this important debate. I feel as though I have joined a secret society comprising those hon. Members who are fascinated by the London underground and who spend their evenings in the House—rather than in other areas of the Palace or in their constituencies in Scotland or in Leicestershire in my case—discussing this interesting subject.
I thank my hon. Friend the Minister for Transport in London for introducing the Bill. It is largely—if not wholly—an uncontroversial measure, which I suspect could have been disposed of in short order. However, I understand hon. Members' enthusiasm in wishing to contribute to the deliberations this evening.
The Bill is uncontroversial partly because few Labour Members represent London constituencies—as do few Conservative Members, although my hon. Friend the Minister is a wonderful exception to that rule.
The discussions that the Minister and I have had about transport matters have related predominantly to the Market Harborough bypass scheme. I was extremely grateful to him for coming—no doubt via St. Pancras, which is on the underground system—to look at the consequences of the bypass scheme and to see the traffic-calming measures that have exercised residents of that wonderful town for a few years. The point I wish to draw out of the Minister's journey from St. Pancras to Market Harborough is the fact that beside the present St. Pancras main line and tube station will be the cross-channel transport link, which is a classic example of the private finance initiative—provision for which is contained in the Bill.
The clauses of the Bill are designed to allow the PFI to be introduced into the workings, management and capital structure of the London underground system. In my view, the biggest project will be at St. Pancras—the underground station will no doubt be integrated with the overground station as a consequence of the Bill and the PFI.
I draw hon. Members' attention to the statement that my right hon. Friend the Secretary of State for Transport made on 29 February, in which he announced this project—which I believe to be the largest construction project in London for some time, if not ever. He stated:
The main CTRL"—
I cannot remember what that stands for.

Mr. Norris: It stands for channel tunnel rail link.

Mr. Garnier: I thank the Minister. He continued:
terminus at St. Pancras will provide an excellent interchange for services to the midlands and the north along the midland main line and the east coast main line, and also with the Thameslink 2000 project which I announced on Tuesday. The new St. Pancras terminus will, of course, respect the architectural integrity of that magnificent building.
That is a point for the hon. Member for Cunninghame, North (Mr. Wilson)—I hope that his book contains a picture of the wonderful structure of St. Pancras station. It is one of the architectural gems of London. It sits above the underground station at St. Pancras.

Mr. Wilson: I agree about the architectural merits of St. Pancras. Does the hon. and learned Gentleman agree that, as the public purse has paid for every penny of the refurbishment of St. Pancras station, it should not now be given away to a private consortium without any financial consideration?

Mr. Garnier: The public should enjoy it—and they will. The travelling public will be able to use the facilities in that building and in the new building, which will be of great benefit to them. It is King's Cross and St. Pancras—it is the same place. The hon. Gentleman is perfectly right. My right hon. Friend the Secretary of State continued:
The Government will transfer certain assets to the promoter: European Passenger Services, free of capital debt; Union Railways, the Government-owned company which has developed the project thus far and supported us in promoting the hybrid Bill; and, lastly, the land and property needed for the project, in particular the railway lands at Kings Cross and Stratford, and surplus properties acquired in connection with previous rail link schemes.
The Government will also provide financial support with a present value of around £1.4 billion, compared with the overall construction cost of about £3 billion. That is an excellent investment for the nation"—
I agree with him—
since we estimate the benefits of the project to be worth around £6 billion".—[Official Report, 29 February 1996; Vol. 272, c. 1000.]
That money will be spent in London, and will be indirectly, if not directly, spent on the underground system—in which the hon. Member for Cunninghame, North apparently has such a great interest.

Mr. Wilson: The problem for the Tories is that they do not know which faction to be part of at any given time. The hon. and learned Gentleman is taking the view that it is an excellent public investment—excellent value for the public purse—to put £1.4 billion of public money, plus a couple of billion pounds of assets, plus a £1.5 billion debt write-off, into this. Does that not put him at odds with Lord Parkinson, who, in 1989, vetoed the scheme on the ground that not one penny of public money should go into any of it?

Mr. Garnier: I am not as old as the hon. Gentleman and I cannot remember Lord Parkinson or anything that he may have said in the House. The hon. Gentleman gave a characteristically bravura performance—I always enjoy his contributions to the House. On another evening, much later than this, he spent about 45 minutes prolonging a debate on vehicle excise by giving us a Wilson's tour of the highlands and islands, which was fascinating.
This evening, he has confined himself to half an hour and, at times, he managed to bring himself back to the terms of the Bill.
The Bill does not allow the so-called reasoned amendment that the Opposition has put down on the Order paper, which reads as follows:
That this House declines to give a Second Reading to the London Regional Transport Bill because although the House welcomes the higher levels of investment in transport infrastructure provided in the Bill by the development of Private Finance Initiative projects by London Regional Transport, it does not believe that the privatisation of London Underground would be in the interests of London, and fears that this Bill contains powers which will be used to that end".
I have looked at the Bill to see whether that fear is justified. I shall refer to the explanatory and financial memorandum on the face of the Bill.
Hon. Members may be interested to know that the notes on clauses provided by the Department, the House of Commons Library brief and—if I can give away a top secret—the central office brief seem to say more or less the same thing: this is an uncontroversial Bill. There is not one shred of evidence to justify the Labour party's fears that this is a back-door privatising measure.
The second paragraph of the explanatory and financial memorandum states:
The Bill empowers LRT to enter into agreements with contractors for the carrying on by the contractors of any activity which LRT does not have the power to carry on".
I shall compare that with the national health service: it cannot build hospitals, it does not always do the laundry, and it does not always provide the food—it buys those services from private companies. That is not privatisation: it is a sensible use of public money to enable public corporations—such as the national health service or London Regional Transport—to get the best of what is available in the private sector.

Mr. Tim Smith: Is my hon. and learned Friend aware that according to the Evening Standard of 5 March, Jimmy Knapp, the leader of the Rail, Maritime and Transport Union, called the Bill privatisation by the back door? Does my hon. and learned Friend think that Mr. Knapp may have drafted the Labour party's amendment?

Mr. Garnier: I gather that, under new Labour, all the doors have been relabelled—so we cannot be sure whether Mr. Knapp knows what a back door is. I was seeking to disprove the soundness of the case put forward by the Labour party's amendment. The explanatory and financial memorandum continues:
Clause 1 empowers LRT, subject to the Secretary of State's consent, to enter into certain agreements with contractors for the carrying on by the contractors of activities which LRT does not have the power to carry on.
Clause 2 makes provision, subject to the Secretary of State's consent, for LRT to acquire land".
I refer again to the national health service which, through trust boards and health authorities, can acquire land. That is not deemed to be privatisation by the back door, front door or through the roof.
The memorandum continues:
"Clause 3 enables the Secretary of State, by order, to provide that certain of LRT's statutory functions are exercisable by another person".

A whole host of nationally important functions are carried out on behalf of the Government or on behalf of public bodies by individuals who are not part of the Government machine or who are not direct employees of public bodies. There is no diminution in the quality of the oversight or of the service provided by those individuals.

Mr. Eric Martlew: Would the hon. and learned Gentleman be happy if the train drivers did not work for London Transport? Would that be acceptable?

Mr. Garnier: What is important is that the driver of the train is qualified to do so. I ask the hon. Gentleman: would he be happy if a fully qualified brain surgeon performed an operation on his head, but happened not to be employed by the national health service? Of course he would. He would be interested in whether that specialist had the necessary skills and qualifications to perform the operation.

Mr. Richard Ottaway: The hon. Gentleman does not need one.

Mr. Garnier: It is not for me to enter into personal banter with my hon. Friend, or to make comments about what is inside the head of the hon. Member for Carlisle (Mr. Martlew).
As my hon. Friend the Member for Wimbledon (Dr. Goodson-Wickes) is precluded from speaking in the debate, because he is the parliamentary private secretary to my right hon. Friend the Secretary of State for Transport, I want to pay tribute to him for the work that he has done on behalf of his constituents to ensure that the Government and London Transport are kept fully up to the mark with regard to the southern end of the Northern line, about which a great deal has been said this evening. He has pressed vehemently for improvements in rolling stock, particularly new arrangements through the PFI, which was discussed earlier by my hon. Friend the Member for Hendon, South (Mr. Marshall) and which has provided huge improvements to what used to be called the misery line, but which I understand can no longer be so called.
My hon. Friend the Minister and many other hon. Members this evening have described this wholly uncontroversial Bill as a technical measure. It removes legal obstacles which would otherwise prevent LT from getting on with what it should be getting on with. This is part of a range of initiatives that the Government and the Department have entered into during the past year or so in order to introduce private finance into these huge and most important publicly needed projects.
Listening to the hon. Member for Eastleigh (Mr. Chidgey), I found it extremely difficult to decide whether he intended to vote for or against the motion, to abstain, or perhaps to go for a combination of all three. No doubt we shall discover later this evening.
I hope that, by the end of the evening, when members of the official Opposition have reached a conclusion and no doubt drawn into the Chamber to listen to their arguments all the other London Labour Members of Parliament who wish to hear the hon. Member for Cunninghame, North, they will have had a change of heart, having realised that their amendment is meaningless and contains the seeds of its own destruction; and that


they will either go quietly away and abstain, or will enthusiastically join the Government in voting for the Second Reading.

Ms Glenda Jackson: The hon. and learned Member for Harborough (Mr. Garnier), at the behest of the Secretary of State for Transport, began his contribution to this evening's debate by referring to the channel tunnel rail link. The Secretary of State pointed out to him the relevant passages in Hansard when the Secretary of State made his announcement to the House. I am presupposing that, as the hon. and learned Gentleman had to have the initials CTRL translated for him.

Mr. Garnier: I am not a professional actor so I am not as good at learning my lines as other hon. Members may be. I should inform the hon. Lady that the Secretary of State did not put me up to speak about the channel tunnel—whatever it is called. What I did was, because I am a Leicestershire Member whose constituents use St. Pancras station, ask my right hon. Friend the Secretary of State for the details and the reference in Hansard since I knew that he had spoken about it on the occasion that I mentioned. I appreciate that there must be a degree of to-ing and fro-ing in a debate such as this, but I would not like the hon. Lady to advance her case on a false premise.

Ms Jackson: I am grateful for what the hon. and learned Gentleman has said, but clearly the Secretary of State is desperate to make his case since he left the Front Bench and went to the hon. and learned Member for Harborough. If the hon. and learned Gentleman was asking for information, I should have thought that it would have been more courteous for him to have gone to the Secretary of State.
However, that was the opening of the hon. and learned Gentleman's contribution. He referred more than once to St. Pancras station and to what has been handed over to the designated operator by the Government, which has been estimated to he £5.7 billion of the nation's assets in cash and kind and, if memory serves, he believed that that was a good exchange for the country.
Writing in The Guardian on Monday 4 March, Victor Keegan, in his economics notebook, the headline of which was, "Public taken for a ride on railways", said:
Don't be deceived by claims that the fast rail link is a triumph for the Government's private sector finance initiative. As the Financial Times pointed out on Saturday, this scheme may even be costing the Exchequer more than the British Rail option which bit the dust in 1989",
and would in fact have cost just £1.4 billion as opposed to the £5.7 billion the CTRL is now costing us. He goes on to say:
There is no chance of the private sector extending the link to the north unless the Government, as usual, underwrites the whole risk while leaving the profits for someone else.
That is what is at the heart of the Opposition's concern about the Bill.
In common with, I believe, every other hon. Member who has spoken in the Chamber this afternoon, I congratulate the Minister for Transport in London on a sparkling and entertaining speech. We have come to expect the Minister to be invariably entertaining, but he excelled even his high standard this afternoon. He spoke for more

than an hour and he was generous in allowing interventions. The fact that 99.9 per cent. of the time he managed to deflect attention away from the Bill is a great compliment to his abilities. In common with other hon. Members, I think that it is sad that the House will lose his presence if he is true to his word and does not stand again at the next election.
The hon. Member for Hendon, South (Mr. Marshall) claimed to have spoken more often, asked more questions and made more speeches regarding the Northern line than any other hon. Member. It must be a bitter agony to him that after all those questions and speeches and after all that time, he managed to bring about absolutely no improvements on what has become known as the misery line without the aid of the all-party Northern line group which, by excessive pressure, managed to get the Government to move from what seemed an intransigent position to consider the proposals that at that time were being presented by ABB on the leasing of new rolling stock for the Northern line.
Here again, I must pay tribute to the Minister, who assisted the all-party Northern line group in bringing pressure to bear upon the Treasury and assisted in at least getting new rolling stock on one of the oldest sections of the oldest underground system in the world.
The hon. Member for Hendon, South was somewhat excessive when he suggested that the leasing of new rolling stock is somehow transforming the misery line into some modern, efficient and consistently reliable line. That is not what I and my constituents know it to be. We will indeed have new rolling stock, but that is about all that will be new. There will still be the agony of waiting to see if the trains will arrive because the track and signalling have yet to be modernised. All that is in the future. The plans that the Government have presented to us this afternoon via the Bill do not lead me to believe that we will be seeing those improvements in the near future.
One of the most charming aspects of the Minister's speech this afternoon was the way in which he presented London underground as being already almost perfect. His description bore no relation whatever to the London underground that I know and which anyone who has occasion to use it regularly will know to be the system for this, our great capital city.
We could undoubtedly argue all night and probably all day tomorrow about the root cause for London's underground system becoming, according, I believe, to the Evening Standard, the worst underground system in the world. Opposition Members have made strong representations that the basic root cause has been the failure to invest adequately in it during the past 16 years. A briefing put out by the Capital Transport Campaign in November 1995 speaks of broken promises and says:
In 1991 the Government commissioned an investigation into London Underground by the Monopolies and Mergers" Commission—
This blamed "chronic underinvestment" for deficiencies in the levels of service—this was five years ago—
and recommended that investment rise to around £700–750 million a year.
In response, Malcolm Rifkind (then Transport Secretary)"—
he is now Foreign Secretary—


said the Government was 'committed to providing the resources for both improving the existing underground and expanding the system'. He promised that investment in the existing railway would be over £700 million by 1993/94. Last year it was just £528 million.
In 1991—just before the general election—the Government also promised £2.1 billion over three years for the existing underground. In the Autumn Statement the following year it was slashed by £700 million. Last year the Chancellor cut the three-year figure back to just £1.2 billion.
The system has had reduced budgets and many broken promises from the Government on the investment that is desperately needed to make the London underground "a moderately modern metro", to quote the managing director of London Underground.
The infrastructure is in serious trouble. For example, London Underground has to remove more than 3 million gallons of water from the system every day. The pumps and the drainage systems were designed in the Victorian era. The problem of flooding was identified in an internal London Underground report in 1993, which stated that emergency investment in drainage systems—at a cost of £18 million—was required simply to keep the network operational. In the event, only £9 million was made available and current investment in the drainage system is running at £5 million a year.
I find it hard to believe—although I would be delighted to be proved wrong—that the Government's private finance initiative, as it is at the moment structured, would attract that level of investment to London's underground system. I regret to say that I have forgotten which of my colleagues made the point—it may have been my hon. Friend the Member for Streatham (Mr. Hill)—but the drainage system is one of those hidden problems into which the private sector is always somewhat slow to put its money. The private sector tends to like to have its contribution publicly emblazoned and visible. Something as basic as modern pumping and drainage systems would be unlikely to attract the private part of the private finance initiative, given—as my hon. Friends have pointed out—that the system as devised at the moment by the Government is both cumbersome and expensive for those businesses which would be interested in entering a public and private partnership—we consider that the best way forward—to invest in the vital and necessary infrastructure of our capital city and the rest of the country.
The lack of investment has led to speed restrictions being imposed on a number of routes and, unless the problem is tackled in the next three years, whole sections of line face closure. We have already had advance warning from London Underground of major closures this year on four lines—the longest and, it could be argued, the most serious being the Bakerloo line, which is expected to be closed for between six and seven months. There are also speed restrictions on the East London line, between Surrey Quays and Wapping; on the Central line, between Stratford and the west end; on the Northern line, between Leicester Square and Moorgate—although it seems on some days that there are speed restrictions to the point at which no trains are running at all on the Northern line; and on the Piccadilly line, between Piccadilly and King's Cross. That is not the only area on the London Underground system that is in desperate need of major investment.
If we look at the supporting structures of the underground, we find that at Sloane Square station last year a supporting girder cracked and the platform had to

be closed. There was no risk to passengers or staff on that occasion, but that girder was fitted in 1868. The problem of aging support structures is compounded by the age of the network. We have the oldest underground system in the world. The East London line was built in 1869, the Metropolitan line in 1863, and the Circle and Hammersmith lines in 1863.
The track on the network is now so old that the number of speed restrictions on the network has doubled over the past two years. London Transport has videos showing the track physically bending as trains run over it. I would hate Conservative Members to accuse me of scaremongering. It is not my intention to suggest that the bending of the track is necessarily a danger to the millions of people who use the underground system every day, but it significantly lengthens journey times and increases the deterioration of the track and the rolling stock. Renewal expenditure alone in 1994–5 was £56 million, but even that level of investment is insufficient to tackle the problem.
Most of the embankments—not an invisible part of the network—on which the track is built were built and designed in the Victorian era. The Victorian building techniques involved piling up mounds of earth that were then overlaid with the rail line. As a result, large sections of the network face problems of subsidence and land slippage. London Transport is engaged in a costly programme of reinforcing the embankments with steel girders to deal with that problem.
I return to the subject of that well-known misery line, the Northern line. Signalling on parts of the Northern line is pre-war. The cost of replacing the signalling on just a small section of the network will be £22 million.
That is enough of the depressing list, which I could lengthen with no great difficulty, to show that there is, and has been for a considerable time, a total lack of the necessary investment in what surely should be the central and supporting arm of London's transport system.
We have heard contributions from hon. Members on both sides of the House, and I regret that I do not know their constituencies in some cases. We heard about the enormous benefits that have been produced for the travelling public by the introduction by the Government of passenger and citizens charters. I know, from talking to my constituents, that charters have increased complaints and smoothed the line between the consumer and the provider of the service so that it is easier to make complaints, but they have not improved services.
Much was made during our debate on fares on the London underground that fare revenues could he used as part of London Transport's central investment structure, but we know that some fares have risen in real terms by 70 per cent. in the past 10 years. For many people, who have no other means of transport to and from home and work other than the underground, the increase in fares can be an increasing burden, especially as the Government have been assiduous in the past few years in ensuring that wage rises have been kept very low.
The point was made that there is already a way of stopping trains on the underground because a driver can close together two wires that run along the tube train tunnels. That is fine, but I have read about the possibility of totally unmanned underground trains without even a driver—although I cannot imagine that they are going to be any part of the Government's plans in the future. There is enough technological expertise around at the moment


to allow trains to run without any staff on board at all. I would not want to travel on such trains, and in any case I cannot see it happening in the foreseeable future.
The last clause of the Bill has to do with reductions in staffing. That causes me some concern. One of the first ways of cutting costs in previous privatisations has always been to reduce staff numbers. I know that the Minister has said that there would be no overall reduction in staff numbers; staff employed by London Underground will simply move, he says, to the private business that is due to enter the two schemes to which he referred. I find that unsatisfactory. Whenever private businesses have taken over from public sector entities, in whole or in part, there have been staffing reductions, wage reductions and usually an extension of the hours that staff are used to working.
I am most concerned about the gradual erosion of LU manning levels and its impact on the safety of the travelling public—especially women. Perhaps the popular press like to dig up stories on this subject, but lately there seem to have been too many reports of attacks on women travelling on their own late at night on certain parts of the underground system.
I approach this issue with no small trepidation. Belsize Park station is one of the stations on my line. I had occasion to raise this matter with the managing director about a year ago. The station contains many long, empty and usually badly lit tunnels. There are no staff on duty late at night. People have to catch a lift which rides down a very long way—the line is deeply sunk in that part of north London—often to alight on a platform that is deserted. There are no staff in sight; there is no means of summoning anyone should an incident occur.
Environmental reasons are certainly paramount when it comes to attracting more people to the underground system—presupposing that London Underground can run a system that meets Londoners' genuine needs. That being so, however, we need to guarantee that everyone travelling on the underground is safe.

Mr. Norris: I acknowledge that the hon. Lady has been stalwart in defending the interests of women passengers, and she raises a serious point about their safety. I know that she will want to reinforce the fact that although there have been worrying incidents on the system, the underground's safety record has measurably improved over the past five years because of steps that London Transport has taken and paid for to make the system safer. LRT recognises that unless people feel safe on the system they will not use it. I know that the hon. Lady would not want to create the impression that passengers on the system are unsafe. Statistically they are safer on the system than in the streets up top.

Ms Jackson: I accept that, but I hope that the Minister will agree that I was describing one type of transport on the network at one particular time—night. Statistical improvements, moreover, mean nothing to a woman who may be raped when attempting to travel on the underground. Statistics meant nothing to one of my constituents whose son was killed in an accident on the underground.

Mr. Norris: indicated assent.

Ms Jackson: The Minister knows who I am talking about. She will be convinced to her dying day that her son's life could have been saved if there had been a member of staff standing on the platform, or if there had been any means of halting the train or summoning help.
There is still room for a great deal of improvement. The most immediately recognisable and reassuring form of improvement would be an increase in staffing at certain hours on the underground.
Despite its pronouncements, London Underground has not done enough yet to make its services accessible to people with disabilities. I can understand the difficulties, but there is a need for major investment, and the Government's private finance initiative will not produce the investment necessary to modernise the system or make it accessible to all Londoners wanting to travel on it.
The PFI, as devised and structured by the Government, is the Government's way of opening the back door to privatising a service which I believe must remain in the public sector. The Opposition believe that the only way to provide the right amount of investment for this system and all our public transport systems is via a genuine public-private partnership. The Government's PFI is not the way forward.
We strongly urge Conservative Members to look at our reasoned amendment with open minds. We all agree that London needs a modern, integrated public transport system, not just for the benefit of the people who live here but for the millions of tourists who come to this great capital city of ours. We need such a system for the economic prosperity and for the well-being of this great city. If we do not sort out our transport problems, companies looking to invest here may go elsewhere. The City might conceivably lose its primacy as well. Information technology and the Internet make it quite possible for financiers, bankers and people who make money by moving it around to relocate their businesses in one of Europe's other capital cities. So a decent transport system for the capital is a vital economic and national necessity.
The arguments expressed in this debate have made it abundantly clear that the Government have not chosen the right way to proceed. I hope that Conservative Members will seriously look at our amendment and consider voting with us, thereby putting the interests of their constituents before those of the party Whips. I hope that they will join us in the Lobby tonight.

Mr. David Congdon: I have listened carefully to the debate. I tried to understand exactly the arguments that the hon. Member for Hampstead and Highgate (Ms Jackson) was advancing, but I am not sure that I am any the wiser in determining exactly where she and her right hon. and hon. Friends stand. The hon. Lady talked about a partnership between the public and private sectors. It was to be noted, however, that whenever the private sector was mentioned, the reference was disparaging. In those circumstances, I am not sure why the private sector would wish to invest.
I pay tribute to my hon. Friend the Minister. Unfortunately, I was unable to listen to the whole of his speech. I heard, however, a tour de force on London's transport system. My only disappointment arose out of my hope that he would give us a potted history of each and every station on the network. I am sure that, on another


occasion, before he leaves the House, he will do so. I am sure that such a presentation would be fascinating. It would enhance his contribution, which has already been excellent, to transport in our great capital.

Mr. Tim Smith: I am sure that the speech of my hon. Friend the Minister was a tour de force. Would not it have been a tour d'horizon if he had covered all the underground stations?

Mr. Congdon: That is true. I welcome my hon. Friend's comment.
The hon. Member for Hampstead and Highgate commented on problems that stem from a lack of investment in London Underground. Since the early 1990s, however, investment has increased significantly. When I listen to debates about the underground system and talk of a lack of investment, it seems to be suggested that problems have arisen only since 1979. I remind the hon. Lady that the Conservative party was in power for only four of the 15 years from 1964 to 1979. What were the levels of investment in the underground service during the dark years of Labour government? During those years there was little money in the kitty for anything and the then Chancellor of the Exchequer had to go running to the International Monetary Fund, begging bowl in hand.
That has been the pattern of investment in the London underground system. When the economic climate has become difficult, money has not been forthcoming. That is why the private finance initiative is so important, especially to a service that is as capital intensive as London Underground.
As a London Member, I am only too well aware of the importance of the underground system to Londoners; as a Member from a Croydon constituency, I am aware of how regrettable it is—I am sure that my hon. Friend the Minister will take due note of this—that the system never managed to penetrate beyond Crystal palace towards Croydon. Indeed, it never reached Crystal palace. Some say that that was because of geological reasons. I am not so sure.
I want to illustrate the importance of the underground system to Londoners. There being no underground stations in my constituency, I recognise how crucial the system is to the transport system as a whole in our great capital.
In transport debates, there is always an argument about whether people should use their cars and whether there should be a congestion tax. That is what we heard from the hon. Member for Eastleigh (Mr. Chidgey). It leads to a sterile debate about either public transport or the private car. There is a lack of understanding of the crucial role of each in a city such as London.
In the Croydon area, the car is crucial in getting to the city centre. The train is vital in travelling from Croydon into central London. The tube is vital in getting about central London. I have always believed that different transport systems have different roles to play. The crucial role of public transport is to get a large number of passengers from A to B, but such a system will never be able to satisfy the myriad peculiar journeys that many people make, especially outside peak travelling hours. The sooner some Opposition Members recognise the key role of the car, the better. They should then put public transport in its proper context.
In London, and especially in south London, my colleagues have not been arguing for more investment in the road network. Instead, they have been arguing for investment in the rail network, including the underground system. As London Members, we recognise the need to ensure that we have a first-class underground system that is able to meet Londoners' needs.
I am never too clear whether too much priority is given to grandiose projects at the expense of some basic infrastructure when it comes to investment in the underground system. The hon. Member for Hampstead and Highgate mentioned important, but unglamorous, issues such as signalling and track maintenance. London Transport needs to get the investment balance absolutely right between large projects, such as the Jubilee line extension or other major investments and extensions, and bread-and-butter improvements to the basic infrastructure.
I draw my hon. Friend the Minister's attention to the situation at Victoria station. It is a crucial station on the network used by Croydon residents. There are excellent rail links from East Croydon station to Victoria, but standing on the Victoria line platform during the morning rush hour is a pretty hazardous experience. There are difficulties if one tube train does not come in immediately after the other.
I understand that the main impediment to achieving a fast throughput of tube trains is the lack of very modern signalling that can introduce built-in intelligence into the system. More antiquated signalling systems tend, unfortunately, to be the norm on the network. It is surely important to he able to maximise the benefits of the massive investment in tunnels by ensuring that sufficient tube trains pass through the system, especially at peak times, so that any dangers to passengers may be avoided.
My plea is to ensure that the balance is right between grandiose projects and bread-and-butter projects. I understand, of course, London Transport management's pressing for big schemes, but more minor projects may be neglected.
I argue—this might be controversial, but I make no apology for that—that ensuring that track is absolutely right and that the signalling system is the most modern available should take precedence over modernising tube stations. I accept that it is important to have modernised stations, but I do not believe that that is as fundamental as having the most up-to-date signalling system and ensuring that track is improved.
There has been significant investment in the underground system. I have mentioned the Jubilee line extension. The PFI involving Northern line trains is another example. In a sense, it becomes false to distinguish funding between London Underground and British Rail. I welcome the recent massive commitments to London in the forms of Thameslink 2000 and the channel tunnel rail link. Those projects demonstrate that the Government are serious about directing large sums into public transport, which is vital to the life-blood of our great capital.
Given the history of capital investment being turned on and off like a tap depending on the state of the economy. surely Opposition Members should welcome the PR with open arms. It provides an opportunity to secure a continuing high level of investment in a vital infrastructure. In a sense, of course, the Bill is a tidying-up measure to remove one or two anomalies in London Transport's powers. I am surprised, however, that it has not been welcomed by Opposition Members.
As I have said, I listened with care to the hon. Member for Hampstead and Highgate. It seems that the Opposition are concerned that the Bill might lead to the privatisation of London Underground. I have no problems with that. I do not care who runs the system as long as it is run well and provides a first-class service for Londoners. As I understand it, however, the Bill is not about privatisation. We may be able to return to that issue on another occasion because it is certainly worth considering.
I was intrigued by some of the proposals that are in train—pardon the pun—for London Underground. I was especially interested in the discussion about using cables alongside the network. The hon. Member for Streatham (Mr. Hill) talked about using cables for various activities. Putting fibre-optic cable alongside the underground track is an excellent suggestion. Surely that would be far better than digging up the road to lay the cables that the Labour party seems to consider so important to our infrastructure. If the Bill provides the possibility for such developments, it should be supported.
The most important aspect of the Bill, however, is its encouragement of the private finance initiative. I hope that many more projects will be possible, providing Londoners with a much improved public transport infrastructure. As I have said, Londoners depend on the existence of a first-class public transport system. We do not want more and more people to drive into the centre of town in the morning rush hour unless that is essential—and the quid pro quo, unless we resort to draconian measures, is sustained investment in the public transport infrastructure.
Unlike the hon. Member for Hampstead and Highgate, I do not think that the real terms increases in fares that have taken place constitute the most serious disincentive; I think that the main disincentive is delay.

Ms Glenda Jackson: May I point out that millions of Londoners have no means of travel other than public transport, which, in many instances, means the underground? For them, fares are of major significance. For example, 56 per cent. of those who live in Camden have no access to any form of private transport. The fact that the hon. Gentleman's party has kept wages down and allowed fares to rise has caused real difficulties for many of my constituents.

Mr. Congdon: With respect, I consider that argument nonsensical. If fares are kept artificially low, the net result is that Londoners—and others, but when the Greater London council was in control it was Londoners via their rates—end up subsidising wealthy tourists to use the underground. That is absurd. There is another net result that is equally significant. The Minister mentioned it earlier. If fares are kept low, London Transport cannot generate surplus revenue to reinvest in the capital infrastructure of the network.

Lady Olga Maitland: My hon. Friend has made a valuable point. Does he agree that considerable concessions are already available to those in need—pensioners and students, for example, who have their own travelcards? Most of those who pay for tickets at the normal rate are in work.

Mr. Congdon: My hon. Friend has made a good point. Such schemes are very helpful.
I do not accept that, when people are deciding whether to travel by road or rail—or by bicycle, perhaps—their choice is determined primarily by price, especially in the rush hour. I believe that it is determined primarily by the nature of their journey. For those who live near an underground or overground railway station that method of travel is very convenient, but it is inconvenient for those who live some way from a station and whose place of work is some way from the station at the other end. I believe that the key factor is convenience in relation to people's travelling patterns—and, as I have said, the incidence of delays is crucial.
A far better way of encouraging more people to use the network with the minimum of inconvenience is to invest in maintaining it to a high standard, ensuring that the signalling works properly and that the track does not cause problems. There would then be no excuse for delays. I mentioned Victoria underground station. The one problem with using that station is that it is not very pleasant to stand on the platform in a crush because there has been a delay as short as two or three minutes. We need investment in signalling, to ensure the maximum number of trains at peak times. I hope that investment via the PFI, over a certain period, will yield the improvements that we all want.

Mr. Toby Jessel: If, as the hon. Member for Hampstead and Highgate (Ms Jackson) suggested, users of the London underground were heavily subsidised, would that not be a monstrous injustice to residents of south and south-west London, where underground lines are extremely sparse because the railway network is the old British Rail southern region and, before that, Southern Railways? Nevertheless, people there have to pay their taxes and local taxes to subsidise the inhabitants of the hon. Lady's constituency. Is that not unjust? Surely we should have nothing to do with it.

Mr. Congdon: My hon. Friend is absolutely right. At the time of the GLC's Fares Fair policy I, as a Croydon resident, did not like having to subsidise other people's fares, and I am sure that many of my constituents would have felt the same.

Ms Jackson: It was something of a revelation to hear the hon. Member for Twickenham (Mr. Jessel) talk about something other than military bands. May I ask him, and the hon. Member for Croydon, North-East (Mr. Congdon), how people in Twickenham will benefit if the air that they breathe is thickly polluted with fumes from petrol-driven vehicles? I know that my constituents would much prefer cars to be taken off their roads. One of the problems is this way of looking at London as if it were a series of totally separate entities, rather than perceiving that the failure to meet its transport needs is one of the reasons why, in transport terms, it is in such a mess.

Mr. Congdon: I certainly accept that it is right to look at London's transport needs as a whole. As I have said, my constituency has no underground stations, but I do not object to the investment of large sums in London Underground. However, I take issue with what the hon. Lady said about her constituents' wanting to get cars off the road. That really means that people want to get other people's cars off the road, but to continue to drive their own.


I am afraid that all the arguments about restraining cars, through bans or congestion taxes—as suggested by the hon. Member for Eastleigh—are dishonest in terms of the electorate. Most people with cars want to be able to use them. The challenge to transport policy is to ensure that, especially during rush hours, people have a realistic alternative and that they can be sure that, if they turn up at the station, they can expect a train to arrive and to take them to their destination on time without their having to leave two hours earlier than they would otherwise have done.
The best way of encouraging people to leave their cars at home is not to ban or restrict the use of cars, but to ensure that trains run reliably. That is why I support the privatisation of British Rail. It is why I support the private finance initiative and it is why I welcome the announcements of further investment in London's transport infrastructure that have been made in the past couple of weeks. I congratulate my hon. Friend the Minister on his efforts to ensure that London has its fair share of transport money. As was pointed out at Question Time on Monday, the vast majority of his Department's spending on London goes to public transport rather than on roads. I have no problem with that and, particularly because I come from south London, I am happy to support the Bill.

Mr. Tim Smith: I am pleased to follow my hon. Friend the Member for Croydon, North-East (Mr. Congdon) as he is an old friend of mine and I agree with much of what he said. He made an especially important point when he said that, although the price of public transport is important, people are essentially looking for reliability in terms of a good public transport system. If it is published that a train will leave the station of departure at a certain time and reach the destination at a certain time, people want to know that on the whole that is likely to happen because they have appointments and meetings to get to and they are busy people.
My constituents have told me that they would not mind paying a bit more to travel in from Beaconsfield, Gerrards Cross and Denham on the Chiltern line to secure a bit of investment, a reliable service and decent trains. That important point demonstrates that, although price is important, a number of other factors are involved in assessing public transport.

Mr. Wilson: Does the hon. Gentleman think that, through public investment, the Chiltern line provides a decent service? If so, why does he want to give it away?

Mr. Smith: The service is not being given away. People in the present management are among the most enthusiastic about privatising services.

Mr. Wilson: They would be.

Mr. Smith: Of course—they know that they can provide an even better service if the shackles of public ownership are removed from them. I have discussed with Mr. Adrian Shooter, managing director of the Chiltern line, his plans for privatisation. The investment has been

a success and we have a better service, but let us not be complacent about this. There is always room for improvement. On the Chiltern line in particular, there is tremendous room for improvement in using assets more effectively. We need an effective marketing campaign. Mr. Shooter believes that he will be able to conduct that campaign much more successfully in the private sector.
I do not know whether Mr. Shooter will win that franchise, but I hope that he does because the management has done a good job and would do an even better one if the company were in the private sector. Therefore, the privatisation of British Rail has my full support. I do not understand how anyone can fail to support it when public ownership has been so disastrous in the past 40 years.

Mr. Wilson: I am sorry to intervene again, but I am interested in the hon. Gentleman's argument. He says that the public service on the Chiltern line is disastrous—to use his word. He says that a public service, delivered within the public sector, paid for by the taxpayer and operated by Mr. Adrian Shooter et al, is disastrous. Is that his position? If not, he is proposing that the public sector should pay for the assets and that the profits should go to a private operator. Where is the long-term perspective in that?

Mr. Smith: I said no such thing. I said that, generally, since nationalisation, British Rail's history had been disastrous and most people would agree with that. In many ways, the Chiltern line is an exception to that rule. [MN. MEMBERS: "Ah."] It is. Not many hon. Members can say perhaps, as I can, that most of the customers of the line in their constituency are satisfied with the service. Nevertheless, there is no room for complacency and improvements could and will be made if the service is privatised.
I better say a word about the Bill. I was pleased when, on 28 February, I discovered that the Government had decided to publish the London Regional Transport Bill because it is a model Bill. It will have no direct effect on public expenditure or on public sector manpower and it will not create any compliance costs for business. Those are three attractive characteristics.
On 28 February, I was serving on the Standing Committee considering the Finance Bill, which ran to some 200 clauses and about 30 schedules. Another tremendous virtue of this Bill is its brevity. It has six clauses. Into those six clauses, the Opposition have managed to read privatisation. I have considered those clauses carefully and I cannot find any reference to the privatisation of London Underground Ltd. I have therefore concluded that the fears referred to in the Opposition's so-called reasoned amendment are utterly unfounded.
My understanding of the Bill—on more than a cursory reading—is that it does something important for London Regional Transport. It removes commercial shackles that were inadvertently placed on it by the London Regional Transport Act 1984. The Bill has my full support because I am a strong supporter of the private finance initiative. All public sector bodies, including London Regional Transport, should make maximum use of it. There has been much talk in the House about how Conservative Members cannot provide any concrete examples of the PFI in practice, but I have two almost concrete examples—I say almost concrete because the M40 will be not concrete, but tarmac.
The first example is the widening of the M40 motorway between Denham and Loudwater in my constituency from three lanes in each direction to four in each direction. I am pleased that, because of my tireless efforts, a surface called porous asphalt will be laid on that motorway and much less noise will result. The important thing to note about the contract is that it will be the subject of a so-called DBFO contract. DBFO is a bit of PFI jargon. It stands for design, build, finance and operate.
The Department of Transport is considering tenders for that contract. Soon a contract will be awarded to one company to take over work on the whole of the M40 between Denham and, I believe, Warwick, to operate the whole motorway and to widen the first section. That substantial contract would not be taking place if we did not have the excellent PFI.

Mr. Congdon: Does my hon. Friend agree that in PFI projects it is important to ensure that risk is genuinely transferred to the private sector?

Mr. Smith: It most certainly is. That is one of the reasons why there has been some delay. Some critics of the PFI have said that it is not moving along quickly enough. I sympathise with that view and with the construction companies that have been expressing it, but the PFI is new and it is extremely important that the Government should ensure, as my hon. Friend says, that risk is fully transferred to the private sector. That may have been a slight sticking point in some of the negotiations. I understand that in the case to which I have referred the delay has been minimal and that we can expect construction to start later this year.
The second example is the PFI contract to extend Wycombe hospital. That excellent national health service contract was referred to by the Chancellor of the Exchequer on Budget day as an example of attracting private sector money into the health service. The Labour party immediately says that this is privatisation, but of course it is not-it is simply doing something intelligent. If we have finite resources, as we always will have for the health service, why not bring in private sector resources to supplement them with a capital project of some scale?

Mr. Stephen Timms: Will the hon. Gentleman confirm that even though that hospital project was mentioned in the Chancellor of the Exchequer's speech, still no contract has been signed to complete it?

Mr. Smith: I can confirm that only last week I received a letter from the chairman of the South Buckinghamshire NHS trust telling me that he was making good progress and that the project was on track. As it is one of the first PFI contracts in the health service, he is leading the way and he is having to ensure that he gets it right. As my hon. Friend the Member for Croydon, North-East would say, the chairman wants to ensure that the risk is transferred to the private sector. He tells me, however, that the project is on course and that we can expect an announcement reasonably soon. I am confident that it will go ahead.
The same applies to LRT. It, too, has a limited amount of cash to spend, so it is sensible to create opportunities for it to supplement whatever the Treasury feels able to make available through PFI contracts. I understand that

the present legislation is such that there is some considerable doubt whether that is possible. That is why the Government have introduced the Bill and I welcome it for that reason.
As someone who represents a constituency on the periphery of London, but with large numbers of constituents who are commuters travelling not just on the Chiltern line, not just on the M40, but on the underground from Amersham, my perception is that the service has improved greatly over the past few years. There has been a tremendous amount of investment in London Underground. My hon. Friend the Member for Croydon, North-East referred to that in his speech and he was right. In a way, it is disappointing that so much money has had to be devoted to safety measures, but what higher priority is there than safety? After the King's Cross fire, it was essential that priority should be given to getting rid of the old wooden escalators and replacing them with modern non-wooden escalators. A great deal of money has been spent on doing that.
As I travel around the London underground system, I am constantly impressed by the quality and quantity of the improvements that have been made. I was at Angel tube station the other day—I had not been there for some time—and I was amazed by what I saw. There used to be a platform in the middle with a tunnel over the top and trains coming in on each side. People felt exposed standing on that platform. The station has now been transformed.
A great deal of work is being done at Bank and on the connection with the docklands light railway. The whole complex is substantial. London Underground has put up a helpful explanatory note about the complicated works. It is spending millions of pounds improving transport facilities for Londoners. I am a great supporter of London's underground. I always travel around London by tube. Anyone who takes a taxi from here to the City needs his head examined. One need only pop on the tube at Westminster to be at Blackfriars, Mansion House, Cannon Street or Monument in a matter of minutes. The same will be true when the Jubilee line is complete. Access to docklands will be transformed. We will be able to travel from here to Canary Wharf in 14 minutes.
The other great LRT success is the transformation in the bus services. The Public Accounts Committee recently examined the sale of the bus operating companies. The Department and London Transport excelled themselves. A report by the National Audit Office concluded
that the Department and London Transport achieved the sale objectives. No purchaser achieved more than a 25 per cent. share of the London bus market. The Department and London Transport completed the sale virtually on target and successfully promoted employee participation in the sale. Four of the ten companies were purchased by management and employee teams.
At £233 million, gross proceeds were substantially higher than expected. A high level of interest was generated by London Transport's marketing campaign and some bidders were more optimistic than expected about the prospects for their targeted business. London Transport, the Department and their respective advisers successfully devised a bidding process which took advantage of this. They generated substantial bidding competition and obtained final prices which were some £30 million higher than the eventual purchasers' initial indicative bids and some £70 million higher than the mean of all indicative bids.
That was excellent.


The PAC has examined many privatisations and many lessons have been learnt. The NAO report is excellent—indeed, a classic of its kind. The report concluded:
Overall, the sale was managed effectively. London Transport and the Department took account of best practice from previous sales and the recommendations of the Committee of Public Accounts. For example, they set clear sale objectives, clearly defined responsibilities, established a project steering group and project director, introduced clawback arrangements on property and commissioned a benchmark evaluation.
My hon. Friend the Minister for Transport in London did all that, and I congratulate him on his achievement. It was a very successful sale, as the NAO has confirmed.
What is more, London Transport's customers will benefit in the long run from the fact that those companies are now in the private sector and have a big incentive to improve and provide the best possible quality of service for their customers. At the end of the day, it is all about customer service—about providing quality of service whether on the underground or on the buses. The way to do that is by bringing in the private sector more and more, so that there is greater competition and better service. The Bill has my support.

Mr. Stephen Timms: I apologise to you, Madam Deputy Speaker, and the House, as although I was present at the beginning of the debate, I had to leave the Chamber to attend a meeting of the Treasury and Civil Service Select Committee and therefore missed much of the earlier part of the debate.
It is a remarkable comment on the Government's management of the private finance initiative that we should be spending our second full day this week on rather hasty and brief Bills that have appeared out of nowhere, but which are required to reassure private sector finance sources before they provide funding for private finance initiatives.
Yesterday, we spent the day on the National Health Service (Residual Liabilities) Bill which, on my reading of it, is even more alarming than this Bill. The NHS Bill provides NHS trusts with security for borrowing potentially enormous sums outside the control of the Secretary of State. It will also have the effect of shifting the risk back from the private sector to the public sector—in direct contrast with what we heard a few moments ago about the requirement for the private sector to take over all the risk. The NHS Bill will achieve exactly the opposite, in an attempt to secure private finance for the national health service.
During recent weeks, the Select Committee has been taking evidence on the PFI from a large number of interested parties. It has become clear that the transport sector is a much more appropriate area than the health service for the application of private finance. The particular reason for that is that the construction of transport infrastructure or the acquisition of new rolling stock creates future revenue streams, typically fare income, that would not have been available otherwise. That can be used to release a sum of privately provided capital for application today in establishing infrastructure, without affecting public finance in any way.
That is not the case in the health service. When a new hospital is built new, small revenue streams may be created from charges for car parking, from the sale of

refreshments in the cafeteria or from sales in the hospital shop—but that revenue is insignificant compared with the cost of building the hospital. Ultimately, the whole cost of the Wycombe hospital referred to by the hon. Member for Beaconsfield (Mr. Smith) will be met from taxation. As capital provided under the PFI is more expensive than capital provided directly by the Government, there is every likelihood that hospitals built under the PFI will, in the long run, cost more than hospitals funded by conventional means.
The position is different with transport because there is the opportunity to use future fare revenues, which might attract significant private finance that would not otherwise have been available to the project without a heavy call on public funding.
I must take issue with the hon. Member for Beaconsfield about the M40. I am sceptical about the ability of the PFI to generate additional revenue in projects such as the widening of the M40. It will not lever any significant additional finance from the private sector. Ultimately, the whole cost of widening the M40 will be borne by the public sector in future payments in future years.

Mr. Tim Smith: I agree with the hon. Gentleman that, in effect, the cost will be spread over a number of years, perhaps 30. The point is, however, that the capital will be provided by the private sector now and if it were not, the widening would not take place at all.

Mr. Timms: I am grateful for the hon. Gentleman's point, which makes exactly my argument. We are not gaining anything new. We are just deferring payment to future years. Since those payments will have to be made for many years to come, there will in future years be fewer resources available for the investment in transport infrastructure that we all want around London and elsewhere.
When additional revenue is created—I am thinking particularly of the construction of railway lines or the acquisition of new rolling stock—the use of private finance is beneficial, but that is not so in the construction of new roads or the widening of motorways unless tolls are imposed. Although that is a different debate, it at least attracts additional revenue.
The principle of the use of private finance is much less contentious when applied to London Regional Transport than it is when applied to the subject of yesterday's debate. The Bill is more problematical because it raises the prospect of slipping towards privatisation—specifically of the underground—by stealth. I was present for the exchanges between the Minister and my hon. Friend the Member for Newham, South (Mr. Spearing) and the hon. Member for Southwark and Bermondsey (Mr. Hughes) about the extent to which the Bill is simply a technical measure. Unlike the hon. Member for Croydon, North-East (Mr. Congdon), I certainly would not support the privatisation of London Underground. I do not think that it would benefit underground passengers, and I do not think that the vast majority of underground passengers believe that it would either. There are many reasons that one could give in support of that view. The underground's future depends and will always depend on substantial public sector support and, therefore, the case for privatisation is not very strong.

Mr. Congdon: I am following the hon. Gentleman's argument carefully. Will he at least concede that the one thing that London Underground is able to do is generate a significant income stream because its operating revenue is more than its operating cost?

Mr. Timms: I entirely accept that. That very fact means that there is potential for the use of private finance in developing London's transport network, about which I shall make some specific points and cite some instances in which I think it will be particularly important.

Mr. Spearing: On creeping privatisation, is my hon. Friend aware that, in a later exchange, the Minister did not deny that there could be wholesale contractorisation, which would amount to privatisation in all but name of existing services, such as power supply, and new railways such as the Hackney-Chelsea line and the line from Whitechapel northwards? In effect, therefore, the Bill is, as it were, blood transfusion by PFI. As my hon. Friend has been learning about that, will he confirm that it gives powers to plan, finance, build and operate?

Mr. Timms: I am grateful to my hon. Friend. I was not present for that exchange, but I entirely agree with him that splitting up the underground network in the way that he has implied would be a seriously retrograde step. It is most important that we maintain an integrated, publicly owned underground network.
Nobody can deny that there is a need for additional capital investment in London Transport at all levels, from the very small to the very large. Some of those requirements might be suitable for the application of private finance—some most certainly are not. I was elected in June 1994 and a couple of weeks later I met the District line management about the need to refurbish East Ham and Upton Park underground stations in my constituency. Exactly the same concerns relate to Plaistow station in the constituency of my hon. Friend the Member for Newham, South. The stations are old and grim and have been neglected for a long time. They have the potential to be restored to a much more attractive condition. There is a lingering charm about their structures, the potential attractiveness of which I would not want to minimise. It would not cost a great deal to make them attractive again.
Those stations are also extremely heavily used. East Ham is one of the seven or eight most heavily used stations on the entire underground network. Indeed, the revenue that it generates for London Underground is also in the top seven or eight revenues generated by all stations in the whole system. Much less well used stations, which generate much less revenue, further down the line have been improved and refurbished, yet East Ham, Upton Park and Plaistow—indeed, the whole string of stations from there down to Aidgate East—have not been refurbished.
The then business manager of the District line attended the meeting to which I have referred. We met at the stations and he assured me that there would be substantial refurbishment in that financial year. Indeed, he even told me the identity of the contractor who had been selected to carry out the work. A few weeks later, however, that commitment was withdrawn. I was told that it had all been a misunderstanding, that there had never been a scheme for carrying out work on the stations and that we would have to wait considerably longer for it to be carried out. I was very upset and surprised by that turn of events.
I subsequently met the chairman of London Regional Transport and I am pleased to say that another good scheme has been proposed. This time I have seen the drawing so I know that the scheme exists to refurbish all the stations from East Ham westwards. In fact, some work has already begun. Closed circuit television has been installed and is operating at East Ham station. I commend the fact that at long last that work has been carried out. It is a considerable reassurance, especially to women using East Ham station and others who use it late at night, as many do.
The rub is that the bulk of the refurbishment scheme on those stations will have to await a decision of the London Regional Transport board, which I understand is to take place in the next month or so. The scheme will have to compete with others. It is necessary and I very much hope that it will be given the go-ahead, but the truth is that there is not enough capital going around even to carry out that essential maintenance. Until that capital is available, the fabric of the network will continue to decline, as it clearly has done in recent years. I do not think that in the particular instance that I have described—station refurbishment—private finance will help much. Elsewhere it may.
The best case that I have seen made for increased investment in London's transport network was made by London First, whose programme has already been mentioned in the debate. Its document, "London's Action Programme for Transport: 1995–2010", is an impressive, well-presented overall view of the needs of London's transport infrastructure. The Minister was present at its launch in the autumn.
I recently received London First's annual report, and I shall read one or two sentences from it, which show what that organisation says about its plan, its programme and the response that it has received so far from the Government. In the introduction the chairman, Lord Sheppard, says,
London's Action Programme for Transport: 1995–2010, published by the London First Transport initiative on behalf of the London Pride Partnership in the autumn, is a landmark document"—
I agree with that—
the first comprehensive and fully costed plan for London's transport needs in 20 years.
The fact that there has been nothing like it for 20 years is startling, but I think we know the reasons why such an important plan has not been drawn up for such a long time.
Lord Sheppard continues:
The challenge for London First in 1996 is to show that, with full commitment, the plan can be made to work and to demonstrate that the benefits to London and the UK from doing so will far outweigh the modest extra investment required.
In his review, the chief executive. Stephen O'Brien, explains how the plan was drawn up. He says:
The Programme is based upon realistic and positive assumptions about London's future and calls for an end to the short-termism which has characterised transport funding and development under successive administrations. It contains three main elements
action to improve existing transport systems
a new infrastructure programme and
an estimate of the funding required.
The total cost over 15 years is estimated at £23 billion. Of this, £11 billion would come from the public sector and, spread over the life of the programme, would not represent a higher average annual expenditure than at present.
It calls on the Government for immediate decisions on commitment to a consistent and adequate programme of investment in the Underground
assurance of the funding necessary to accelerate the completion of the bus priority and cycle networks
authorisation to start the statutory procedures for Thameslink 2000"—


of course, we have made some headway with that in recent weeks—and

firm commitment to proceed with CrossRail.
The chief executive's report goes on to say:
The first test for the Programme was the November 1995 Budget which…failed to provide the level of funds called for in our Programme.

Mr. Norris: Surely the hon. Gentleman has not dealt with the statement in the London First report adequately. He correctly identified the sentence in which the total programme over 15 years was valued, and pointed to the extent of the public contribution that London First assesses might be necessary, but he neglected to mention the balance that London First acknowledges can be provided through various forms of private finance. Is not that figure as large as the figure that London First suggests should come from the public purse? Does not that fact make the point behind the Bill, which would facilitate that large proportion of private finance that London First itself says must be aggregated with the taxpayer's contribution?

Mr. Timms: Consistently throughout my speech I have said that I accept the need for private investment in the development of London's transport, so I agree with the Minister there. However, what I want to emphasise is the fact that London First says that last year's Budget was the first test of the programme and that it
failed to provide the level of funds called for in our Programme.

Lady Olga Maitland: I have been listening carefully to the hon. Gentleman's reservations about the private finance initiative. He has said that he accepts it, but under something of a socialist scheme. Does he not agree that his party's proposals would make the PFI a sham, because it would be so restrictive that it would drive away investment, and thus would not achieve the real inward investment that we hope will come into the transport system. Labour's proposal simply would not work.

Mr. Timms: I do not agree with that at all. Indeed, as I said earlier, what we saw yesterday was an attempt to shift risk away from the private sector and back into the public sector. The word "sham" could well be used in that connection, to describe the attempts to use private finance in the health service.
I have said throughout the debate that we need private finance in the development of London's transport system, and the hon. Member for Sutton and Cheam (Lady Olga Maitland) can rest assured that that will be successful under a Labour Government.
I have only a few minutes left, so I shall make my final point. I greatly welcome the recent announcement that the Government will support the proposal for an international passenger station at Stratford on the channel tunnel rail link—a project in which the Minister has taken a close interest for many years. I am delighted by the outcome of the Government's decision-making process. The announcement was the best news that east London has had for 50 years. It was also good news for the prospects for imaginative development of public transport in this country.
The hon. Member for Croydon, North-East was rather uncertain about the prospect of the completion of the Jubilee line, but I welcome it. The decision about Stratford highlights the need for a planned dispersal by London Regional Transport from the channel tunnel rail link.
St. Pancras is already overcrowded and it is not easy to travel from there to the most likely destinations. Crossrail would provide us with the opportunity for people to leave the channel tunnel trains at Stratford, get on to crossrail and travel to their destinations in central London, the west end, Heathrow and elsewhere by rail. Ideally, I would like to see a connection to crossrail from the channel tunnel rail link at Stratford—and an amendment has been tabled to the Channel Tunnel Rail Link Bill to facilitate that.
I emphasise the fact that when the Jubilee line is complete, if the Government simply maintain the level of investment now going into it and use it to build new rail infrastructure, that will be sufficient to build crossrail. I hope that when he replies to the debate the Minister will be able to say something about the prospects for crossrail in the light of the deliberations that I know are already under way.
I have no doubt that private finance will need to be secured to build crossrail, and I am happy with the idea. I hope that we can achieve real progress in giving the scheme the go-ahead quickly.
Finally, I endorse what my hon. Friends have said in the debate and what London First, too, has said: we need an adequate and consistent level of finance. We need both. Investment must be not only sufficient, but stable, consistent and predictable, so that LRT knows where it is and we can develop the transport infrastructure that London needs for the future.

Mr. Nirj Joseph Deva: Madam Deputy Speaker, I am fortunate indeed to catch your eye in this important debate. I am only sorry that so few Labour Members are listening to an important debate that affects the lives of Londoners.
Brentford and Isleworth, my constituency, is blessed with seven tube stations and two tube lines, which I estimate are used by about 8,000 of my 80,000 constituents daily. The tube is the life-blood of my constituents, who use it as a means of reaching the City and elsewhere, and part of their everyday life. I therefore find the Bill an important measure—but a marginal one—in the great improvements that must be made in London Underground.
I should say, as an aside, that often my constituents have written to ask that Turnham Green station be more frequently used by the tube lines, which sometimes do not stop there.
The private finance initiative is an important step in introducing private finance to the process of improving our transport infrastructure. The measure is essentially technical; it is not revolutionary or earth-shattering. It will allow London Transport to take full advantage of opportunities for increasing investment.
Much of the London Underground network is very old—Victorian—and needs substantial investment. Accordingly, the Government have increased investment to record levels in recent years—to £1 billion in 1995–6.
Much of that investment has been directed to upgrading the Central line, which is now nearly complete, and constructing the new Jubilee line.
The benefit of private finance is that the Government and London Transport will look to the private sector as a source of further substantial investment. The Labour party, however, appears totally unaware of the great changes in capital financing of infrastructure projects that are taking place throughout the world. Labour Members talk as though they are on another planet—another economic environment.
The useless, almost asinine, debate about whether finance should be private or public shows a failure to understand that there is no such thing as public finance. Public finance is drawn only from people in the private sector making enough returns to pay taxes so that the Exchequer can put that money back into the coffers—the investments—of the economy. Public finance is not created uniquely by any group of people—civil servants, Ministers and the like—creating enterprise for themselves. They simply use the private sector's money in a different form.
If we can enable the private sector to put its money directly into improving our infrastructure projects without the interference of Ministers, civil servants and even parliamentarians, so that the return on capital is fair and equitable, what is the sense of that asinine point that the Labour party keeps wheeling out?
I was fortunate to follow the excellent speech of my hon. Friend the Member for Beaconsfield (Mr. Smith) and the earnest speech by the hon. Member for Newham, North-East (Mr. Timms), but I say to my hon. Friend the Minister for Transport in London that we must consider the private finance initiative in the light of the way in which private sector investment is improving the infrastructure of much of the globe.
The world is changing rapidly. One cannot keep capital at home. Capital is global and moves to find the right rates of return. No party—not even the Labour party—can prevent British capital from moving out of Britain to find a better rate of return elsewhere. We are competing with other countries for the capital that is here, which should be invested in our infrastructure projects. That is why, although I may sound rude when I say so, I find the Labour party's argument very muddled. Labour Members do not seem to know what they are talking about.
Today, even the World bank—that great instrument of international development—the International Finance Corporation and our Commonwealth Development Corporation are investors with the private sector in building roads, power stations and water systems with private capital in far-off places such as the Philippines, Indonesia, India and Malaysia. That private capital seeks the highest rate of return, provided that the risks are fair.
Against that competition, we must encourage the same capital sources to fund our infrastructure projects and to develop our infrastructure. Throughout the world, schemes such as "build, own and operate", "build, own and transfer", and "build, lease and transfer" are operating. In the past few years, £6,000 million has left this country to be invested in India alone. In the past five years, £30 billion has left this country to be spent on infrastructure projects around the world. We need that capital here to develop our infrastructure. If we are unable to give the best rate of return for that capital, it will not stay here.
I must say to my party and to the Opposition that cautious little measures such as the Bill, introduced drip by drip, ain't going to do the job. We need to be as bold and imaginative as other countries, which have taken such investment opportunities by the horns and attracted our capital, our insurance investment funds and our pension funds. That capital is now building roads, toll systems and many other things in those countries. We can move forward to attract private finance only by avoiding the muddled thinking that the Labour party has been peddling all evening and taking a clear, decisive view that we need to put such a private finance policy into operation as soon as possible.

Mr. Wilson: Given the hon. Gentleman's evangelical zeal about this matter and the £30 billion that he said has unnecessarily left Britain to fund public-private projects in other countries, he must surely be deeply ashamed at how late in the day it was before the Tory party embraced the PFI.

Mr. Deva: Not at all, because the Tory party has created the climate in which that capital could be accrued. The Tory party created the climate that has turned our country into a major investor in various projects around the world. Last year, this country accrued £36 billion in dividends from our overseas investments, both indirect and project investment. It was not our party that left behind a ramshackle state of affairs in 1979, and which created a climate that led investment to go abroad. Now the Tory party has created the climate for that investment to be made in this country.
With great respect, when the Labour party talks about understanding private finance, I laugh because it has not the slightest idea what it is talking about. It is clear tonight that Opposition Members still do not know what they are talking about in terms of private finance and capital project investment.
For that reason it is important that even this small Bill, which is not a revolutionary one, should not be opposed as it has been tonight. It should have gone through on the nod because it is part of the continuing progress that we must make to involve the private sector in the development of our infrastructure. I therefore support the Bill.

Lady Olga Maitland: First, may I say three cheers for this excellent little Bill? I am merely sorry that I was not in the Chamber when my hon. Friend the Minister for Transport in London opened the debate because I know from experience what a witty speaker he is. He has a constant twinkle in his eye and, more than that, he has always taken a great interest in some of the causes that I have put before him. I have taken constituents to see him who have been concerned about red routes in London and he has offered them a sympathetic ear. I also remember from a debate on roads that we had a shared concern about over-zealous local authorities putting in road humps, about which I have powerful and strong feelings.
The Bill is a significant and important one because as a traveller on London underground I rejoice in the fact that the Government have not only spent more than £1 billion on investment in the past financial year alone,


but have recognised the importance of making sure that we have an underground system that is ready and capable of coping with travellers' needs way into the next century.
The truth is that good transport in London is not only important for residents and for those who work here, but important to those who travel here from all over the country; to those who invest here from overseas; to those who decide to base their business headquarters and companies in London and to the many tourists who come here. They come for many reasons but one is that they can get around our great city.
As a traveller, I feel safe on our London underground. I would not say that about the New York subway. I have travelled many, many miles on the London network, which covers 200 stations, because I know that it is reliable and gets me from A to B. I accept that it is sometimes slowed down by signalling problems but by and large, I know that I can set out at a certain time and get where I want to go. A good example of that, and one where timing is crucial, is getting out to Heathrow airport. The last thing that I would want to do is miss a plane. If I tried to go by car, I could face indescribable log jams that would cause frayed nerves. Travel on the underground means getting there on time and without a frazzled mind.
The efficacy of our underground means that it is safe, although there have been instances of handbag snatching. By and large, I do not feel at risk. Nor is there any danger to the safe management of the underground. It upsets me when Labour tries to suggest that if we bring in private investment—or come the day, on which I would rejoice, that the system is privatised—safety will go awry. That is not true. It did not happen with British Airways or Stagecoach. They have gone from success to success.
This is an effective Bill that is designed to bring investment and resources for projects that everyone accepts cannot not be paid for from the public purse. The question is how to bring the money in. The Labour party hops from one leg to the other. It says that it is in favour of the PFI, then it is not, then it is, then it is muddled and then it wants restrictions on investment. Companies will not play its game. They will go away and leave the taxpayer with the cost. That is another spending pledge by the Labour party that this country will not wear.
Under the Government's scheme in this effective, neat little Bill, funding will be provided to give us a thoroughly modern metro system with new and refurbished trains.

Madam Deputy Speaker (Dame Janet Fookes): Order. I am sorry to interrupt the hon. Lady, but I am tired of the burblings on the Opposition Front Bench.

Lady Olga Maitland: Burblings are about as much as the Labour party can produce.
Not only will the investment that I was describing give us new and refurbished trains on all lines, it will help us to provide more frequent services, faster journeys, less crowding, high-quality stations, greater capacity and a better general standard of services. It will help locally with other aspects of infrastructure such as reliable lifts and escalators and provide new opportunities all around.
Perhaps the most significant aspect of the Bill is that it enables projects that need big capital outlays and a broader perspective. I rejoice that the Bill could provide

resources for better communications in the underground service. The use of fibre-optic technology will mean a better, faster, more efficient system for the underground service and better information services for passengers. In sum, it will be a communications service that takes us well into the next century.
I welcome the investment in the prestige ticketing system. Its technology will also take us well into the next century. I like the idea of a smart card system, which will undoubtedly modernise London Transport ticketing management; let alone the idea that it could be interactive with the bus service. The contractor would be responsible for selling and checking tickets, and basically assume all the responsibilities that London Underground does not need to handle. There must be considerable investment in order to ensure an efficient power supply and the Bill will allow that to occur.
I am encouraged by the fact that there is no shortage of prospective investors in any of the three areas. I understand that about 10 serious inquiries have been made to each sector and that, all told, potential investment could total £750 million—money that would otherwise come out of taxpayers' pockets, which is clearly what Labour Members favour. There is no doubt that the legislation will benefit all concerned.
I am sorry that Labour Members are being rather churlish about the Bill. I do not understand why they have tabled a reasoned amendment—I do not think that it is at all reasonable. They suggest that "privatisation" is a bogey word and that is irresponsible. Labour Members remain in the stone age while countries across the globe are following the British example and privatising their industries. The Labour party is out of touch: it has no credibility when it comes to economic management.
We are planning a transport system of which London can be proud. London is a respected world capital and we want to maintain that position by enhancing our existing facilities. I have no doubt that the Bill will provide a thoroughly decent and modern metro system. That is a real, not an elusive, goal and I congratulate my hon. Friend the Minister on introducing the measure.

Mr. Toby Jessel: It is a pleasure to follow my hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland), particularly in the light of her reference to the importance of London. London's prosperity as a tourist centre—not only because of the millennium, but year in, year out—is of tremendous value to the economy of the United Kingdom as a whole and affects the prosperity and the employment of the entire country. It is essential that the transport and economy of London are buttressed and placed in a flourishing position as soon as possible.
My hon. Friend spoke about less crowding on the London underground. At about 6.30 this evening I saw a very crowded Piccadilly line train. As a matter of fact, I have spent nearly all of today travelling to and from the funeral of a relative in Wales. For that reason, I apologise to you, Madam Deputy Speaker, to the Minister and to the House for having missed most of the debate.
I was driving back to London along the M4 between Heathrow and London. As I came to the raised part of the motorway. I saw a Piccadilly line train—at that point the track is above ground—travelling along a viaduct about


10 or 12 stations and eight or nine miles out of central London. It was packed with people and I could see through the windows that the pressure upon the passengers travelling home from work, or perhaps in some cases to Heathrow, must have been hugely uncomfortable. It is very important that investment in the underground relates to capacity and to steps that will eliminate crowding in the long run.
Of course, it is true—as hon. Members have already said, including my hon. Friend the Member for Beaconsfield (Mr. Smith)—that there has been a huge amount of investment in London Transport in recent years. We have had the Victoria line, and the Jubilee line is now well advanced and under construction—as we can see in the square outside the building every working day of our lives. It is very important that the Jubilee line is completed and goes out to Greenwich in time for the millennium exhibition—apart from its vital need to serve people in south-east London.
There is the prospect of crossrail; and on the way to Heathrow—not the underground, but a surface railway line—an extension of the line from Paddington, with its spur to Heathrow, in which my hon. Friend the Minister has been greatly involved in recent years. That will be of enormous benefit. But there is not, and has not been, enough investment. Hon. Members on both sides of the House are right to point out the need for more investment in London transport—and I do not mind whether it comes from public or from private sources, as long as it takes place and enhances the quality and the capacity of the London underground service.
I used to be a member of the Greater London council, about 25 years ago, and it used to control London transport. The Greater London council and the London county council before it were usually Labour-controlled—and they did not provide enough investment for it. The fact is that there has been a backlog in investment over the years, and this Bill will do something—even if it is only a marginal amount—to put matters right by enhancing the provision of investment in London transport, which is what we need and which both sides of the House ought to encourage.
Transport by the tube has always been uncomfortable. I can remember that in the Greater London council's county hall library there was a book called "Traffic and Theatre Rhymes" by Guy Boas, who I believe was a schoolmaster. One of the rhymes was called "The Underground" and it went as follows:

"The underground goes round and round and also to and fro
And men in blue look after you and tell you how to go
They never quite direct you right, although of course they know
The platform man has got a plan for dealing with the queue
He makes men wait behind a gate until their train is due
They watch their train depart again and then he lets them through".

That is an annoying reflection of officialdom on the London underground between the wars. There is another poem in the book "Traffic and Theatre Rhymes", which relates not to the underground but to trains generally.
It is:

"When a puffer
Meets a buffer
One of them
Is bound to suffer
If the buffer
Then the puffer
Knows itself
To be the rougher
If the puffer
Then the buffer
Knows itself
To be the tougher
If the puffer
And the buffer
Both unhappily
Should suffer
Then the buffer
Knows the puffer
Must be driven
By a duffer".

There are a lot of duffers in this place, and most of them are on Opposition Benches. I think that it is important in these matters constantly to seek to improve standards. I am glad to see that the Secretary of State has just arrived. When he was a member of the Greater London council about 25 years ago, he wrote a pamphlet, which I remember reading, about building up tourism in London. Although his pamphlet was mainly about hotel provision, it touched on the underground and on the railway system as well.
It has already been pointed out in this debate that approximately 25 per cent. of the passengers on the London underground are overseas visitors. As I have already said, the expansion of tourism is vital to the economy of London and the economy of Britain as a whole. If we are to encourage tourism, we must ensure that our transport facilities are not only efficient but pleasant.
Research by the Society of West End Theatre showed that when people decide to go to a play in the evening their choice is affected not only by whether they think that they will like the play itself, but by the whole idea of the outing—their refreshments, transport, parking provision and so on. If they do not like the transport, they will be put off from going to the play. The theatre is one of the things that pulls visitors into Britain and London as tourists. People will not come to London and Britain in such large numbers if the transport facilities are not satisfactory, pleasant and comfortable.
I would like to see sponsorship and the private finance initiative, on which I have heard my right hon. Friend the Secretary of State speak, extended not only to tickets and stations, but to the trains themselves. If, as my hon. Friend the Member for Beaconsfield suggested, one was catching a tube from here to the City, one would get on a train which might have, say, a Tesco carriage, a Sainsbury's carriage and a Marks and Spencer carriage. One would then have companies whose names everyone knows vying with one another in order to promote facilities that are pleasant and attractive. Their good name would depend on the quality of the carriages and the comfort and convenience of passengers. They would have


every incentive to ensure that the transport was more comfortable, more pleasant and less crowded than it is at the moment.
I would like to see that included in the Bill and I hope that when my hon. Friend the Minister replies, he will cover all those points. It is on the future quality of public transport in London that wealth, prosperity and employment in London so largely depend. I have great pleasure in supporting the Bill, but I should like to see it more widely drawn and that should be attended to in Committee.

Madam Deputy Speaker: Mr. Brian Wilson, with the leave of the House.

Mr. Wilson: I was trying, on the back of an envelope, to compete with the poetic efforts of the hon. Member for Twickenham (Mr. Jessel). I got as far as,
The debate has concluded without rancour,
Although the last speaker was the hon. Member for Twickenham.
It was a little unsporting of the Tory Whips to keep the crème de la crème of Tory Back Benchers to the last. In the past half hour we have had a veritable banquet of elocution. It is a tribute to the hon. Member for Twickenham, and probably to a public school education, but I do not know anyone else who can make the words "go", "through", and "queue" rhyme.
The calibre of speeches that we have heard recently suggests that the subject is not taken immensely seriously by the Government. I pay tribute to the Minister, as has been done earlier, for at least giving it the courtesy of a long and full speech. [HON. MEMBERS: "Hear, hear."] I do not over-egg the pudding, but it was not bad. By the standards of what we heard later, it was the performance of a maestro.
Recent speeches have also demonstrated that the standard of Tory central office brief is not what it used to be. We heard several speeches that were based on the patently false premise that the Opposition are opposing the principle of public-private co-operation in extending investment in the London underground system. That is the antithesis of the truth. As I said in my opening speech, we might well not have needed this debate if the Minister and I had been able to sort things out between us and accept each other's words as our bonds. The problem that muddied the waters in advance of the debate was the fact that the deputy leader of Tory party, I mean the Deputy Prime Minister—he has so many titles, but that is not one of them—produced the statement that he wanted privatisation of the underground in the next Tory manifesto. I hear cluckings of agreement from Conservative Members.
To be fair to the Tories, virtually every hon. Member except the Minister has said today that it is a pity that the Bill would not privatise the underground, because they are all in favour. Some have gone further and said that they want the same franchising system for the underground as is being introduced for the railways. Others obviously want to separate the trains from the tracks. Opposition suspicions are, therefore, obviously justified.
Today, we have had an opportunity to explore the argument and to put down markers against the privatisation of the London underground system. I have not the slightest doubt that that view will be shared by the vast majority of people, not only in London but throughout the country. Just as some 90 per cent. of public opinion is opposed to rail privatisation, so 90 per cent. of public opinion would be opposed to the privatisation of London Underground, for all the excellent reasons that have been adduced by Opposition Members.
The hon. Member for Brentford and Isleworth (Mr. Deva) gave us a little lesson in global economics and the way in which British capital is taking flight to build roads and railways everywhere in the world except Britain. That tells us more about the loyalties of British capital than about the Bill. If the hon. Member actually believes that if only the vehicle for public-private investment in infrastructure had existed, British capital would have been put into Britain instead, he must explain to us why the public-private initiative was launched only in 1994. Before then, contractors had plenty of business in this country and other parts of world on the basis that they were hired to do the job and were paid for the job. They performed a task—usually the construction phase of projects—and they were good at it.
Labour recognised quite some time before that there were possibilities in extending and harnessing the role of the private sector to bring capital in, not only to fulfil the contractor role, but to take some of the maintenance risk, as is only reasonable, and—on other less easy to define occasions—perhaps to take some operational risk. That principle has not been in dispute for some time in the Labour party, so it is a bit rich for the hon. Gentleman to give us lectures when the Government have been so belated in coming to that conclusion.
We had a more general discussion earlier about the merits of privatisation and some relevant examples were quoted. Since then, by pure coincidence, I have received a parliamentary reply, the contents of which I shall share briefly with the House. In preparation for the latest phase in the disposal of the family silver—Railtrack—I thought it would be a good idea to find out how much debt has been written off by the Government for each privatisation since 1979. I got the answer today. It is extraordinary.
Since 1979, £22.5 billion of debt has been written off by the Government to facilitate privatisation. We mentioned British Airways earlier. At today's prices, £347 million of debt was written off as a sweetener for the privatisation of British Airways. Frankly, if any business suddenly had £347 million of debt written off, it would find it an awful lot easier to make a profit—because it would not have to service the debt—than it did before the debt was cancelled.
It is quite a revelation to find that this Government, who plead parsimony on every other count, have written off a staggering £22.5488 billion in debt owed to the public purse to facilitate their privatisation programme. I wonder how much more debt will be written off to facilitate Railtrack' s privatisation. If Conservative Members who have spoken today get their way, how much more will be written off to facilitate the privatisation of London Underground? Fortunately that will not happen because it cannot be done before the general election.
We often hear the great Tory masters and mistresses of finance talking about prudence with the public purse, and about how there is never enough money to spend on anything worth while, yet they are quite prepared to write off £22.5 billion of taxpayers' money to fulfil their political aim of privatisations that enrich those who have invested, but certainly not taxpayers. That is an extraordinary commentary on the values of the Government.
This has been an interesting debate which, although lighthearted at times, has had a serious purpose. It has given us the chance to discuss the underground system, and there have been knowledgeable speeches from hon. Members familiar with the subject. Of course one way of getting more money into the system is through the fare box. I know it is not fashionable nowadays to do so, but I want to pay tribute to the way the Greater London council operated public transport in London. At least some of its legacy survives, to the great benefit of the underground system.
In 1981, fares on the underground had reached their highest point in history. Owing to the introduction of the Fares Fair scheme, patronage of the underground soared to new heights. [Interruption.] If any Conservative Member wants to intervene and has the courage of his convictions, he can easily be accommodated.

Mr. Tim Smith: I am grateful to the hon. Gentleman for giving way to me so enthusiastically. Holding fares down artificially meant that the taxpayers of London had to foot the bill for rich tourists—that was my point.

Mr. Wilson: Reasonably priced public transport certainly attracts tourists, just as it attracts me. The Tories are ideologically blind; they never can recognise that there is a balance to be struck. Lower fares lead to greater use. Of course there is a point below which fares cannot be taken, but if they are too high, people are driven away from the service. Once the Government of the day—unfortunately they are still the Government—stepped in and forced the abolition of the Fares Fair scheme, patronage of the underground fell to its lowest level since the dark days of war in 1943. The underground has had to recover from that low point ever since.
The hon. Member for Sutton and Cheam (Lady Olga Maitland) said, in her Madam Bountiful way, that the needy are already assisted by means of concessionary schemes. It is worth remembering that those schemes are paid for by the London boroughs—that is their political decision. They have had the political courage to do that because such a socially equalising charge makes it possible for people of various categories and income groups to use the underground system.
Even the existence of the travelcard is a legacy from the days of the GLC—and the Government cannot get rid of them, as part of their drive towards rail privatisation, because it would be so politically unpopular. The Tory idea running through these debates—that everything in the public sector is bad—is both bankrupt in terms of truth and dogmatically unreasonable. The electorate increasingly realise that. The hon. Member for Beaconsfield (Mr. Smith)—a good example of what I am talking about—cannot wait for the Chiltern line to be privatised. We heard a rant about the disastrous record of British Rail in the public sector. The Chiltern line attracts a great deal of interest in the private sector, unlike most

British Rail franchises, because public investment has made it a first-class railway service that is run in the social interest. It is operated so that it can make a contribution to the overall finances of the railway.
If the Chiltern line, which has the potential to be profitable, is removed from the system and is converted into a profitable railway in the interests of private shareholders, that will be to the financial disadvantage of the rest of the network, much of which will still be in the public sector.
That is typical of the Government's approach to the public sector. It is all right, apparently, if the public sector provides moneys and creates assets. That having been done, the Government move in, write off the debt, sell the assets cheap and let the private sector milk the profits that have come from public sector finance.
I have referred to books that set out the history of the London underground system. I should explain that I am a great admirer of enterprise. Where would we be without the Victorians? The Victorians built the underground system, built the railways and created many wonderful public assets, which we still enjoy. Enterprise is a wonderful thing, as is vision. It is sad, however, that the Tories have diluted enterprise to the point at which they believe that it consists of stealing public assets and securing profits the taxpayer paid to create. That is the Tories' idea of enterprise.

Mr. Smith: rose—

Mr. Wilson: I note that the hon. Gentleman wishes to intervene.
If someone has paid for something and another person takes it away without paying, what is a better word for that than stealing? It seems not to be an unreasonable word in the circumstances. It is surely not a moral transaction to take the Chiltern line, for example, it having been paid for by the taxpayer, and convert it so as to make private profit, without any recompense to the taxpayer. If that is set as an example of enterprise against what genuine entrepreneurs did, what a pathetic bunch the Tories are today. The sadness and the tragedy for the United Kingdom is that a Government who have been in office for 17 years cannot appreciate what constitutes enterprise.
The Government have had it so easy for so long. There have been public assets to rip off for so long. It is only when the well runs dry that, it is to be hoped, someone will get round to the idea that part of the role of politicians is to stimulate and engender genuine enterprise to ensure that there is investment, rather than to take assets created by entrepreneurs in the public sector and dress them up with a self-congratulatory term such as private enterprise.

Mr. Smith: If the hon. Gentleman is so keen on public ownership, will he tell us how Railtrack would be taken back into public ownership by Labour?

Mr. Wilson: All will be revealed in due course. The hon. Gentleman is obviously in the know. Will he tell me whether there will be a golden share? Is there to be a sale of 51 per cent. or 100 per cent.? Perhaps he will tell me if it will be possible to sell Railtrack at all. After all, it is clearly a high-risk investment in every sense of that term.
I return to London Underground. We shall not vote against the Bill. Instead, we shall vote for the Opposition amendment, which is on the Order Paper to demonstrate our support for the public-private concept, on which we have led the way and with which we find no ideological difficulty. We are talking all the time to those with whom we shall work to make public-private partnership projects come to fruition. Indeed, that is not an issue of division within the House because, to some extent, the Tories have caught up with us.
How can Tory Members be satisfied with the Government's record? Throughout London, lawyers' offices are full of documents—they are piled to the ceiling—setting out public-private partnership projects that have never come within 100 miles of being fulfilled because of the terms that the Government have set. Lawyers who work on such projects tell us what they think of the Tories and their version of the private finance initiative: they will speak of the frustration that is caused by negotiating endlessly on projects that never come about. They do not believe that the present Government have any commitment to the PFI. Unless it can satisfy their ideology by transferring all the risk—including the operational risk—to the private sector, the Government are not interested.
Throughout the genuinely entrepreneurial sphere, there is a real thirst for a Labour Government who will work with the private sector to make public-private partnership projects work to the benefit of the national infrastructure, and specifically to the benefit of London Underground.

Mr. Norris: With the leave of the House, Mr. Deputy Speaker, it is with a considerable sense of relief that I utter the immortal words, "This has been an interesting debate." We heard excellent speeches from my hon. Friends the Members for Chipping Barnet (Sir S. Chapman), for Hendon, South (Mr. Marshall), for Croydon, North-East (Mr. Congdon), for Beaconsfield (Mr. Smith), for Brentford and Isleworth (Mr. Deva), for Sutton and Cheam (Lady Olga Maitland) and for Twickenham (Mr. Jessel), and from my hon. and learned Friend the Member for Harborough (Mr. Gamier). We also heard extremely interesting speeches from my good friend the hon. Member for Streatham (Mr. Hill) and from the hon. Members for Eastleigh (Mr. Chidgey), for Hampstead and Highgate (Ms Jackson) and for Newham, North-East (Mr. Timms)—and, of course, from the hon. Member for Cunninghame, North (Mr. Wilson). Many of them made extremely kind personal remarks—albeit with a faint whiff of those old-fashioned obituaries that I fear I shall have to accustom myself to in the House.
I am delighted to see that my hon. Friend the Member for Chipping Barnet is present. He is a long-term supporter of London Transport. He made a germane point about Northern line trains: he said that it was extremely desirable for us to secure the new trains through the private finance initiative, at a gross contract cost of about £400 million,

but expressed regret that they might not be delivered as quickly as we might have liked. I am advised that GEC Alsthom, which won the contract—

Ms Short: In Birmingham.

Mr. Norris: Indeed. I understand that GEC Alsthom is currently suffering from a delay in production. One of the key features of the contract that we have been able to negotiate with GEC Alsthom is that the delay will not simply result in further delay for London's taxpayers and passengers; GEC will have to pay a penalty to London taxpayers, in the form of a rebate of part of the price of the contract, in recognition of the fact that it was not prepared to start the contract on time.
I cast no aspersions in relation to possible reasons for the delay. No doubt there are perfectly good reasons for it. I merely make the point that it underlines the cardinal advantage of transferring that part of the risk to the private sector. For the first time, the contractor has a real stimulus to ensure that what is promised is delivered when it is asked for.
The hon. Member for Eastleigh was kind enough to refer to my election to the companionship of the Institution of Civil Engineers. I promised myself that I would get that into Hansard at least once before my retirement; I have done it now, so I can retire tonight a happy man. It was extremely kind of the hon. Gentleman to bother to mention it, and I was greatly honoured to receive it.
More to the point, I understood the hon. Gentleman's analysis and his points about a strategic London authority. I hope that he will accept that the creation in 1992 of a specific post in the Department of Transport to take a multi-modal overview of transport in the capital has been of value to London. The hon. Gentleman is right that it is impossible to consider these issues in a disaggregated way. We must have an integrated view of how services in the capital operate, but such a view does not imply that all services need be under one control or ownership. That is the wrong sort of integration. It leads to a sclerotic view of transport provision and to the sort of provision that for many years handicapped the development of the public transport service not only in London, but outside the capital.
I issue a word of caution to the hon. Gentleman. If he is saying, on behalf of his party, that he will fund crossrail, Thameslink 2000 and all the other expensive projects to which he referred, I should like him to say so and the House to be able to cost such a commitment. He asked me a simple question: does the Bill facilitate privatisation? I hope that, listening to the argument throughout the long debate, he has been convinced that the answer on that straightforward point is of course no.
The hon. Member for Cunninghame, North made the discreditable suggestion that my hon. and learned Friend the Member for Harborough might not be worth the fees that he is privileged to charge to his occasional clients. In an emergency, I would certainly turn to any hon. and learned Member who, with Madam Speaker herself in the Chair, could introduce the Market Harborough bypass and the channel tunnel rail link into a debate on London Regional Transport. He gave a brilliant exposition, stretching my credulity only when he asserted that he was too young to have known my noble Friend Lord Parkinson because that cannot conceivably have been the case.
My hon. and learned Friend touched a raw nerve in the Opposition by suggesting that the reasoned amendment might have been drafted by Mr. Jimmy Knapp rather than by the Labour party.

Ms Short: I drafted it.

Mr. Norris: If the hon. Lady says so, I accept that assertion.
My hon. and learned Friend touched on a point that is absolutely seminal to the debate. He pointed out how extraordinarily foolish it was to concentrate on who the employer of an individual might be, whatever function he was to discharge in the public service, without considering properly whether he was properly trained, qualified and equipped to do his job. That is what is important and Conservative Members have never lost sight of it because they are interested in practical solutions. It was significant that the Opposition should have drawn the distinction which led my hon. and learned Friend to make that point.
The hon. Member for Hampstead and Highgate, who represents the deepest station on the underground—192 ft down—said some kind personal words, but then lowered her normal high standards by asserting that the Evening Standard had referred to the system as the worst in the world. It was not the Evening Standard but, sadly, the hon. Member for Rotherham (Mr. MacShane) in a petulant and intemperate outburst which was immediately contradicted by informed Members on both sides of the House.
The Healey and Baker survey of international world cities establishes the relative worth of a number of characteristics which determine the quality of life in great cities. It concludes that, among the major cities in every continent included in the survey, London had the best public transport system.

Ms Short: Better than Paris?

Mr. Norris: Better than Paris. I know that the hon. Lady has not been in her job long. I recommend that she obtain a copy of that survey, which could make extremely embarrassing reading for the Labour party, and I caution her not to make statements about the paucity of provision in London before reading that objective assessment of the quality of the system.

Mr. Wilson: rose—

Mr. Norris: I hope that the hon. Gentleman will allow me to continue, if I may.

Ms Glenda Jackson: rose—

Mr. Norris: I will give way to the hon. Lady as I am quoting her.

Ms Jackson: I am grateful to the Minister for pointing out my error. Does he agree that although the opinion did not begin in the Evening Standard, the newspaper certainly splashed it in banner headlines over that evening's edition, so it was clearly a view with which the newspaper probably agreed?

Mr. Norris: Stewart Steven, when he was editor of the Evening Standard, told me when I complained to him about the mild petulance of one of his editorials:

Steve, my entire readership is hanging from a strap on your system when they read my paper. If I tell them what I know to be the case, which is that it is the best system in the world, they will never believe me and, more to the point, they will never buy my paper.
I have always admired Mr. Steven—he is an excellent journalist and he was a superb editor of an always readable paper—hut I let him make his headlines in his own way.
The important point is that I am determined to ensure that we base our opinions on objective evidence. I am not in the business of decrying London or its transport system because it is important to establish London not only as the finest city in the world, which it is beyond peradventure, but as the city with the best international links to and from it—that, too, was a conclusion of the survey—and the best transport links within it. That is the reality, and Labour Members would do well to remember it. They should also not be quite so free in their denigration of London. It ill behoves hon. Members, many of whom represent London seats, to degrade the reputation of what is in fact one of our greatest national assets.
I want to make a technical point. The hon. Lady mentioned pumping, and she was right: there is a huge operation on the underground which daily pumps out the millions of gallons of water which comes into the system, as it does into any subterranean structure. The hon. Lady said that because of the rising water table in London the problem is likely to become worse and then suggested that, because it would not be possible to stick an advertising hoarding down the side of such a pump, the private sector would somehow not be interested. She misses the point. There is every virtue in taking such an operation and ensuring that it is put out to public tender so that we can see whether the private sector might be able to perform that vital role on behalf of London Underground in a more efficient and less expensive way than London Transport is currently able to do. Hon. Members do not have to rely on my words, because that is exactly the attitude that London Transport takes.
My hon. Friend the Member for Croydon, North-East, in his interesting speech, referred to the subject of fares. I pay tribute to the former Greater London council, which was far-sighted in introducing the travelcard. My hon. Friend was right to say that that has been of lasting benefit to Londoners and I am delighted to confirm that, as ever, it remains central to our ticketing policy. I fear, however, that my hon. Friend was quite wrong in what he said about the consequences of the Fares Fair policy. I have never denigrated the ambitions of those who introduced that policy, who no doubt believed that such a policy would result in improved ridership and reduced congestion. It did the former, but not the latter. The tragedy is that the additional journeys made on the underground were by people who were not transferring from cars: they were simply additional riders.
My hon. Friend was right to say that the consequence of a great lowering of fares on the underground is that the major recipients are the millions of Londoners who already use the system. They will no doubt be grateful. However, if we are looking for an efficient use of public funds, that is not the way to go about it.
The Bill is a modest measure—a limited but important one, which while not affecting the fundamental role of London Transport will enable it more effectively to harness the talents, skills, enterprise and finance of the private sector in a way that any sensible Londoner will wish to encourage.

Question put, That the amendment be made:—

The House divided: Ayes 154, Noes 185.

Division No. 76]
[10.00 pm


AYES


Ainger, Nick
Grocott, Bruce


Allen, Graham
Gunnell, John


Alton, David
Hall, Mike


Anderson, Donald (Swansea E)
Hanson, David


Armstrong, Hilary
Heppell, John


Ashdown, Rt Hon Paddy
Hill, Keith (Streatham)


Ashton, Joe
Hoey, Kate


Austin-Walker, John
Home Robertson, John


Barnes, Harry
Hood, Jimmy


Barron, Kevin
Howarth, Alan (Strat'rd-on-A)


Battle, John
Howarth, George (Knowsley North)


Beckett, Rt Hon Margaret
Hughes, Robert (Aberdeen N)


Berth, Rt Hon A J
Hughes, Roy (Newport E)


Benn, Rt Hon Tony
Hughes, Simon (Southwark)


Bennett, Andrew F
Illsley, Eric


Berry, Roger
Jackson, Glenda (H'stead)


Betts, Clive
Jackson, Helen (Shefld, H)


Blunkett, David
Jamieson, David


Brown, N (N'c'tle upon Tyne E)
Jones, Jon Owen (Cardiff C)


Bruce, Malcolm (Gordon)
Jones, Lynne (B'ham S O)


Burden, Richard
Keen, Alan


Byers, Stephen
Kennedy, Charles (Ross,C&S)


Caborn, Richard
Khabra, Piara S


Callaghan, Jim
Kilfoyle, Peter


Campbell, Mrs Anne (C'bridge)
Kirkwood, Archy


Campbell, Menzies (Fife NE)
Lestor, Joan (Eccles)


Campbell, Ronnie (Blyth V)
Lewis, Terry


Campbell-Savours, D N
Lloyd, Tony (Stretford)


Canavan, Dennis
Loyden, Eddie



Chidgey, David
Lynne, Ms Liz


Chisholm, Malcolm
McLeish, Henry


Clapham, Michael
McWilliam, John


Clark, Dr David (South Shields)
Madden, Max


Clarke, Eric (Midlothian)
Maddock, Diana


Clarke, Tom (Monklands W)
Mahon, Alice


Clwyd, Mrs Ann
Marek, Dr John


Cohen, Harry
Maxton, John


Connarty, Michael
Michael, Alun


Cook, Frank (Stockton N)
Michie, Bill (Sheffield Heeley)


Corbyn, Jeremy
Michie, Mrs Ray (Argyll & Bute)


Cox, Tom
Milbum, Alan


Darling, Alistair
Miller, Andrew


Davies, Bryan (Oldham C'tral)
Morgan, Rhodri


Davies, Chris (L'Boro & S'worth)
Morris, Estelle (B'ham Yardley)


Davis, Terry (B'ham, H'dge H'l)
Murphy, Paul


Denham, John
Nicholson, Emma (Devon West)


Dewar, Donald
O'Brien, William (Normanton)


Dixon, Don
Olner, Bill


Dobson, Frank
Pike, Peter L


Dowd, Jim
Pope, Greg


Eastham, Ken
Powell, Ray (Ogmore)


Etherington, Bill
Prentice, Bridget (Lew'm E)


Fatchett, Derek
Prentice, Gordon (Pendle)


Faulds, Andrew
Primarolo, Dawn


Flynn, Paul
Quin, Ms Joyce


Foster, Rt Hon Derek
Raynsford, Nick


Foster, Don (Bath)
Rendel, David


Fyfe, Maria
Roche, Mrs Barbara


George, Bruce
Ruddock, Joan


Gerrard, Neil
Sheldon, Rt Hon Robert


Godman, Dr Norman A
Short, Clare


Godsiff, Roger
Simpson, Alan


Golding, Mrs Llin
Skinner, Dennis


Gordon, Mildred
Smith, Andrew (Oxford E)


Griffiths, Nigel (Edinburgh S)
Smith, Chris (Isl'ton S & F'sbury)


Griffiths, Win (Bridgend)
Smith, Llew (Blaenau Gwent)





Soley, Clive
Tyler, Paul


Spearing, Nigel
Wallace, James


Spellar, John
Wareing, Robert N


Steel, Rt Hon Sir David
Watson, Mike


Stevenson, George
Wicks, Malcolm


Strang, Dr. Gavin
Williams, Alan W (Carmarthen)


Sutcliffe, Gerry
Wilson, Brian


Taylor, Mrs Ann (Dewsbury)
Winnick, David


Taylor, Matthew (Truro)
Wright, DrTony


Thompson, Jack (Wansbeck)



Timms, Stephen
Tellers for the Ayes:


Tipping, Paddy
Mr. Joe Benton and Mr. Eric Martlew.


Touhig, Don





NOES


Alexander, Richard
Gale, Roger


Allason, Rupert (Torbay)
Gallie, Phil


Amess, David
Gill, Christopher


Arbuthnot, James
Goodlad, Rt Hon Alastair


Arnold, Jacques (Gravesham)
Goodson-Wickes, Dr Charles


Arnold, Sir Thomas (Hazel Grv)
Greenway, Harry (Ealing N)


Atkins, Rt Hon Robert
Greenway, John (Ryedale)


Baker, Rt Hon Kenneth (Mole V)
Griffiths, Peter (Portsmouth, N)


Baker, Nicholas (North Dorset)
Grylls, Sir Michael


Banks, Matthew (Southport)
Hague, Rt Hon William


Bates, Michael
Hamilton, Rt Hon Sir Archibald


Batiste, Spencer
Hamilton, Neil (Tatton)


Bellingham, Henry
Hampson, Dr Keith


Beresford, Sir Paul
Hargreaves, Andrew


Brffen, Rt Hon John
Harris, David


Bonsor, Sir Nicholas
Hawkins, Nick


Booth, Hartley

Hawksley, Warren


Bottomley, Peter (Eltham)
Heald, Oliver


Bowis, John
Hendry, Charles


Brandreth, Gyles
Hill, James (Southampton Test)



Brazier, Julian
Hordem, Rt Hon Sir Peter


Bright, Sir Graham
Howard, Rt Hon Michael


Brooke, Rt Hon Peter
Howell, Rt Hon David (G'dford)


Browning, Mrs Angela
Hughes, Robert G (Harrow W)


Bruce, Ian (South Dorset)
Hunt, Rt Hon David (Wirral W)


Burns, Simon
Hunt, Sir John (Ravensbourne)


Burt, Alistair
Hunter, Andrew


Carlisle, Sir Kenneth (Lincoln)
Jack, Michael


Carrington, Matthew
Jessel, Toby


Cartrjss, Michael
Jones, Gwilym (Cardiff N)


Chapman, Sir Sydney
Jones, Robert B (W Hertfdshr)


Clarke, Rt Hon Kenneth (Ru'clif)
Kirkhope, Timothy


Clifton-Brown, Geoffrey
Knapman, Roger


Congdon, David
Knight, Mrs Angela (Erewash)


Coombs, Simon (Swindon)
Knight, Rt Hon Greg (Derby N)


Cope, Rt Hon Sir John
Knight, Dame Jill (Bir'm E'st'n)


Couchman, James
Knox, Sir David


Cran, James
Kynoch, George (Kincardine)


Currie, Mrs Edwina (S D'by'ire)
Lart, Mrs Jacqui


Day, Stephen
Lawrence, Sir Ivan


Deva, Nirj Joseph
Legg, Barry


Devlin, Tim
Lester, Sir James (Broxtowe)


Dorrell, Rt Hon Stephen
Lidington, David


Dover, Den
Lloyd, Rt Hon Sir Peter (Fareham)


Dunn, Bob
Luff, Peter


Eggar, Rt Hon Tim
Lyell, Rt Hon Sir Nicholas


Elletson, Harold
MacKay, Andrew


Emery, Rt Hon Sir Peter
Madel, Sir David


Evans, Jonathan (Brecon)
Martland, Lady Olga


Evans, Nigel (Ribble Valley)
Malone, Gerald


Evans, Roger (Monmouth)
Mans, Keith


Evennett, David
Mariow, Tony


Fenner, Dame Peggy
Marshall, Sir Michael (Arundel)


Field, Barry (Isle of Wight)
Martin, David (Portsmouth S)


Fishbum, Dudley
Mates, Michael


Forman, Nigel
Mills, lain


Forth, Eric
Moate, Sir Roger


Fox, Dr Liam (Woodspring)
Monro, Rt Hon Sir Hector


Fox, Rt Hon Sir Marcus (Shipley)
Montgomery, Sir Fergus


Freeman, Rt Hon Roger
Needham, Rt Hon Richard


Fry, Sir Peter
Neubert, Sir Michael






Newton, Rt Hon Tony
Steen, Anthony


Nicholls, Patrick
Stephen, Michael


Norris, Steve
Stern, Michael


Onslow, Rt Hon Sir Cranley
Streeter, Gary


Oppenheim, Phillip
Sweeney, Walter


Ottaway, Richard
Taylor, John M (Solihull)


Paice, James
Temple-Morris, Peter


Pattie, Rt Hon Sir Geoffrey
Thomason, Roy


Peacock, Mrs Elizabeth
Thompson, Patrick (Norwich N)


Pickles, Eric
Thurnham, Peter


Porter, David (Waveney)
Townsend, Cyril D (Bexl'yh'th)


Powell, William (Corby)
Trend, Michael


Rathbone, Tim
Trotter, Neville


Redwood, Rt Hon John
Twinn, Dr Ian


Renton, Rt Hon Tim
Viggers, Peter


Riddtek, Graham
Waldegrave, Rt Hon William


Rifkind, Rt Hon Malcolm
Walker, Bill (N Tayside)


Roberts, Rt Hon Sir Wyn
Waller, Gaiy



Wells, Bowen


Robinson, Mark (Somerton)
Whitney, Ray


Rowe, Andrew (Mid Kent)
Whittingdale, John


Sackville, Tom
Widdecombe, Ann


Shaw, David (Dover)
Wiggin, Sir Jerry


Shaw, Sir Giles (Pudsey)
Willetts, David


Shephard, Rt Hon Gillian
Wilshire, David


Shepherd, Sir Colin (Hereford)
Winterton, Mrs Ann (Congleton)


Sims, Roger
Wolfson, Mark


Smith, Tim (Beaconsfield)
Wood, Timothy


Speed, Sir Keith
Yeo, Tim


Spencer, Sir Derek
Young, Rt Hon Sir George


Spteer, Sir James (W Dorset)



Sproat, lain
Tellers for the Noes:


Squire, Robin (Hornchurch)
Mr. Derek Conway and Mr. Patrick McLoughlin.


Stanley, Rt Hon Sir John

Question accordingly negatived.

Main Question put forthwith, pursuant to Standing Order No. 60 (Amendment on Second or Third Reading), and agreed to.

Bill read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).

Orders of the Day — LONDON REGIONAL TRANSPORT BILL [MONEY]

Queen's recommendation having been signified—

Motion made, and Question put forthwith, pursuant to Standing Order No. 50A(1)(a),

That, for the purposes of any Act resulting from the London Regional Transport Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable out of money so provided under any other Act. —[Mr. Bates.]

Question agreed to.

Orders of the Day — DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 101(6) (Standing Committees on Delegated Legislation),

Orders of the Day — CONTRACTING OUT

That the draft Contracting Out (Functions in relation to the Welfare Food Scheme) Order 1996, which was laid before this House on 19th February, be approved.—[Mr. Bates.]

Question agreed to.

Orders of the Day — EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 102(9) (European Standing Committees),

Orders of the Day — WORKER INFORMATION AND CONSULTATION

That this House takes note of European Community Document No. 11954/95, relating to worker information and consultation; and supports the Government's view that any extension of the existing Community requirements on worker information and consultation is unnecessary and undesirable—[Mr. Bates.]

Question agreed to.

PETITIONS

Tower Blocks (Southampton)

Mr. James Hill: I wish to present to the House three petitions from the residents of three high-rise council blocks in Southampton. They asked me personally to bring them to the House because they feel that they are not being considered by Southampton city council and they were stunned by the council's decision not to remove asbestos from their blocks of flats but to paint over the asbestos. In the three blocks, there must be about 200 children. There are certainly nearly 400 signatures from the various families.
The danger of asbestos is well known to everyone. Therefore I ask the House—that means the Department of the Environment—to look into the matter. Southampton city council has admitted that the safety of its residents is always a prime concern, and has said that it will appoint an independent analyst in the near future. Whether that will happen or not, I do not know, but the whole structure of the housing committee and the debates that have taken place lead me to be concerned about the wishes of the tenants, who will have to remain in their accommodation while people in protective clothing go around trying to neutralise the asbestos. A threat is posed to the life of anyone who is in contact with that terrible fibre, which will obviously be in the air while the work is carried out.
The three blocks concerned are Sturminster house, Albion towers and Shirley towers, all in the city of Southampton. I well remember those blocks, because when I became chairman of the housing committee in Southampton, we decided that the construction of those blocks ought to be stopped. Unfortunately, they had been partly completed, so the work had to be finished.
The humble petition states:
That asbestos has been discovered in the structure of the buildings

That the City Council is proposing not to remove this asbestos, but only to seal it in its place;
That we fear for the health of ourselves and especially our children if this asbestos is not properly removed.
Wherefore your Petitioners humbly pray that your honourable House will take what measures lie in its power to ensure that we, and other residents of council-owned property, are given all possible protection.
I have three petitions and with your permission, Mr. Deputy Speaker, I should like to put them in the petition bag.
To lie upon the Table.

Royal Ordnance (Chorley)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]

Mr. Den Dover: It gives me great pleasure to highlight the need for an enterprise zone at Royal Ordnance, Chorley.
In the past 17 years, this Conservative Government have displayed a tremendous vision for the enterprise economy, which has shown itself in our economic performance, particularly in the past two years. Those Government policies have comprised the creation of urban development corporations and enterprise zones. They have ensured that new ideas have flourished and new enterprises have been set up around the country. We have prime examples of that success in the Metro centre in the north-east, by Newcastle, and the Merry Hill centre in the west midlands. I venture to suggest that there would have been nowhere near that investment and retail expansion in those areas without enterprise zones.
Similarly, just 20 miles from Chorley, the Central Manchester development corporation has revitalised huge areas of what was a decaying city, and the Trafford Park development corporation has done a marvellous job on a clapped-out old industrial park.
In the past two years, I have raised the need for an enterprise zone on a number of occasions—first with the Prime Minister, whose answer on 22 February was interesting. On that occasion, I said that I welcomed the latest plans for enterprise zones to be established in areas where coal mining was running down and labour opportunities were diminishing, and I called for those zones in areas such as Chorley.
The Prime Minister recognised that enterprise zones had been successful, and said:
In areas that face particular difficulties because of substantial job losses, perhaps because of the collapse of a single employer or industry, we look across the board to see what help can be given. Enterprise zones are an important part of that, but not necessarily the whole of it."—[Official Report, 22 February 1994; Vol. 238, c. 143.]
The basis of tonight's debate is to examine the various alternatives open for the regeneration of the Royal Ordnance site at Chorley, which has suffered massive job losses.
The owner of the site, Royal Ordnance, is a wholly owned subsidiary of British Aerospace, which is a first-class employer in the defence industry throughout the north-west and the rest of the country.
The whole 900-acre site is contaminated by munitions. It was used for the filling of shells and all sorts of bombs and other ammunition for many years. Three quarters of the site is in Chorley borough council and one quarter in South Ribble borough council. I welcome the presence of my right hon. Friend the Member for South Ribble (Mr. Atkins), who wants to add a few comments at the end of my speech.
The site has always had direct rail access. It is directly between the M6 and M61 motorways, so, while it needs decontamination and much infrastructure, it is a strategic site that would have first-class communications.
Since the war, when there were 30,000 munitions workers on the site, there has been a dramatic fall in the amount of labour employed. It was down to 6,000 or 7,000

about 20 years ago, and there are now only 100 production workers. We have the headquarters of Royal Ordnance, and I welcome the fact that there are 350 white-collar workers on the site. They are located on the southern perimeter, on one of the roads.
Enterprise zones have been designated in the past few years in Nottinghamshire, Yorkshire and Durham. I am anxious, because of the peace dividend and the rundown of defence jobs, to fight the cause for enterprise zones in areas that have suffered from the dramatic fall in the number of defence jobs. That affects not only Chorley and the north-west but the whole country.
The advantages of enterprise zones are tremendous. There is a 10-year period without business rates and 100 per cent. capital allowance for people investing in the area; and they are basically planning-free zones, unless the use of toxic chemicals is involved. People generally have a free hand.
The sort of development that I, Royal Ordnance and my right hon. Friend the Member for South Ribble would like would involve mixed uses. We want a reasonable amount of residential development, but of the right sort—for buyers from our area, not for incomers. We want a business park that would include manufacturing, light industry and offices. It would have some retail content, but the main aim is not a retail investment such as the Metro Centre or Merry Hill.
I am delighted that my hon. Friend the Minister for Small Business, Industry and Energy has played a part in ensuring that we get Konver funding from Europe. That ensures that we can change from defence manufacture towards civil production, and get a commercial business centre started. So far, it has been only small fry. That is why we need the massive injection that we would get from an enterprise zone.
What are the alternatives to an enterprise zone? In our area, unemployment is below 5 per cent., and we have no chance of getting assisted area status. We would need an unemployment rate of 15 or 18 per cent. or even higher. I welcome the fact that we do not have that. I like to think that much of that results from my efforts and those of other Conservative Members in the area, who have kept unemployment in Lancashire lower than in the rest of the region or the nation.
We have put in single regeneration budget bids in the first two rounds. The Government office in Manchester gave us a no-no in each case. I am not hopeful about rounds three and four, and there will be less money available in the rounds to come.
English Partnerships has been helpful, but it has been charged with redeveloping brown-field sites throughout the United Kingdom. It has a massive task, which will need not hundreds of millions, but billions, of pounds to redevelop all available sites. It is spoilt for choice, but it has been very helpful. Some investigations are going on at the moment, and I applaud it for playing its part. Frankly, this site will not be developed for decades unless we have a designated enterprise zone.
I have already paid tribute to Trafford Park and Central Manchester. They have done wonders in the north-west. Royal Ordnance has put in for planning permission on a mixed-use basis, and it hopes that the two local authorities will play their part so that it can do full viability studies. I am not hopeful that we can see our way ahead.


Two years ago, I led a deputation from the two local authorities to meet the then Minister, who is now my right hon. Friend the Secretary of State for Transport. He made constructive comments, but said two things. First, he said that it was not necessarily the right way ahead, and that we must examine all possible alternatives. The Minister had been advised by his civil servants that there was little or no chance of securing European Union approval.
Following the deputation, on 18 April my right hon. Friend wrote a letter in which he said:
I promised to write to clarify the European Union position regarding the designation of Enterprise Zones. My officials have spoken with our representative in Brussels (UKREP) who confirm that the Commission's position remains that Enterprise Zones are extremely unlikely to be approved if located outside Assisted Areas. Of course, under the Treaty of Rome, the UK is able to notify the Commission of a proposal to designate a zone outside an Assisted Area, but the unambiguous advice from Brussels is that the Commission will reject any such proposal".
We have only to look at the events of the past week to see that the Commission always wants its own way.
My right hon. Friend the Member for South Ribble and I are here this evening to champion the cause of an enterprise zone. Article 92, section 3 of the treaty of Rome, under the heading "Aids Granted by States", says:
The following may be considered to be compatible with the common market:
(b) aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State".
That article could be applied to defence industries, not only in this country but in other member states. A submission could be made, and the European Union would then make a decision—and I would fight it all the way.
I ask that Royal Ordnance, as the landowner, and the two local authorities, which support the concept of an enterprise zone, be allowed to fill in the necessary forms and make out their case. We could then examine that and other alternatives to see what may be done.
I raised the matter in the Environment Select Committee hearing of 19 July 1995 with my hon. Friend the Member for Skipton and Ripon (Mr. Curry). In answer to my query about the possibility of a designated enterprise zone within the European Union, he replied:
There are really two aspects to this. The first is, does the European Union allow it; the answer is yes but the conditions are very severe and it takes an interminable time to deliver one … it is because there are a great deal of conditions to fulfil, there are activities which have got to be excluded from an enterprise zone and there are contracts which have got to be signed with umpteen people in order to deliver them. With the best will in the world, we are talking about years, not months, to get an enterprise zone from zero to operation. So that is the first answer. The second answer is there is a real issue about whether enterprise zones are the most effective answer; whether or not they do, to some extent, divert investment, while in this long period of getting it up and running whether, in fact, investment is deferred as well as distorted. So I have to tell you that my own view is that I do not say 'I never want to see another enterprise zone', but I would want to make sure I had explored every other avenue before I would say that an enterprise zone seemed to me the right route to go down.
I argue that it is the right route and that we should have the chance to bid for it. I am convinced that the process will take years, but the site has lain stagnant for 10 or 20 years, and something must be done: the blot on the landscape must be removed. I am sure that many jobs can be attracted to the area, and I look forward to being allowed to pursue the case for an enterprise zone.

Mr. Robert Atkins: I am grateful to my hon. Friend the Member for Chorley (Mr. Dover) for allowing me to make a brief contribution to the debate. He has laboured long and hard—as long as he has been a Member of Parliament—to have the site's importance recognised. We had hoped that the British Aerospace takeover of Royal Ordnance would ensure the continuation of employment on the site, but that was not to be.
As my hon. Friend said, it is a substantial site, of which a small proportion is in my constituency. I have followed my hon. Friend's lead in going from pillar to post in putting the case for an enterprise zone. I was an Environment Minister when my hon. Friend led a delegation to meet Department of the Environment officials, and he understood that I was not able to be present on that occasion.
My hon. Friend the Minister will recall our travails in Committee when considering the Environment Agency legislation. We examined the problems of contaminated land and what could be done to retrieve such sites into the development cycle. This is a case in point: we are looking to attract industry to that substantial site and to create jobs.
While the South Ribble borough council and Chorley have some differences about a number of suitable sites in the area, this site could be used to create jobs and attract industry—particularly high-tech industry, which would help to recover some of the costs associated with remediating the contaminated land.
It would not be acceptable to house residents from, say, Preston on the site—as is being proposed by the county council and by others. We want to see a mixed development of industry—predominantly in a nice high-technology environment—on the site. If housing or recreational facilities could be put on the site as well, so be it. In essence, we are looking for industry and we are looking for jobs.
I ask the Under-Secretary of State for the Environment to do what he can to meet the concerns of my hon. Friend, who is pressing for enterprise zone status—and I have joined him in supporting the principle of wanting more industry on the site. I ask him to give an undertaking this evening to review the options and to consider what might be done in the best interests of Chorely and South Ribble. Having done that carefully, he could then advise us what can be done along the lines that we have been pressing.

The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford): I am grateful to my hon. Friend the Member for Chorley (Mr. Dover) and to his right hon. assistant the Member for South Ribble (Mr. Atkins) for raising the issues surrounding the site. It is interesting and fascinating. Both my right hon. Friend and my hon. Friend have been battling with this issue, with much energy, for a considerable time. I agree that we need to make every effort in this area, and in other areas like it, and use such sites productively. I applaud the point made by my right hon. Friend about the productive use of the site.
However, we have to accept that there is a scale to the task which means that it will inevitably have to have a slower track than has been followed in some other cases.


As my hon. Friend has demonstrated, the Royal Ordnance site is complex and difficult: there are some 1,500 buildings of various types, roads, distribution areas, open spaces, test areas and dumping grounds. Hon. Members will appreciate that a site of this size—some 300 hectares: from my back of the envelope mathematics, approximately a square mile—is not only large but diverse. Therefore, there is not one single approach or means of tackling it.
I believe that an enterprise zone on such a complex site would be counter-productive—the area does not have high unemployment relative to some other areas. An enterprise zone, and an enterprise zone alone, would, to my mind, stifle investment in the area—while everyone in the industry waited to see whether it came forward, and while we tried to explain to Brussels why we should have such a site. It is quite clear from the answer that my hon. Friend has received that it is unlikely that we will obtain such permission.
In the early 1980s, a number of sites were designated as enterprise zones on an experimental basis, and they had a relatively high cost compared to some of the other methods. In December 1987, we announced that the enterprise zone scheme would not be extended unless there were exceptional circumstances—as was the case with the eight enterprise zones designated since that time. Each one was in response to a sudden major impact on industry caused by a closure of a traditional heavy industry—shipbuilding, steel making or coal mining. I concede that there is a parallel that one could make in this area from the Royal Ordnance.
This area of Chorley does not have a poor economy. In fact, it has a vibrant and wider economy—which would considerably complicate matters when we tried to get permission from Brussels. As my hon. Friend said, it has been made clear that a new enterprise zone, located outside an assisted area, would be resisted—to put it mildly.
I have, as my right hon. and hon. Friends know, asked the officials in the Department to work closely with the local authorities, and particularly with English Partnerships, to consider a range of options available for tackling the site.
As my hon. Friend the Member for Chorley knows, English Partnerships has recognised the site's economic potential and significance. Substantial work has been done already to investigate the potential of the Royal Ordnance site, targeted specifically at prospects for its redevelopment and rejuvenation.
My right hon. and hon. Friends will be aware of the study carried out by the consultants at the end of 1994. That aimed to formulate a strategic framework for the complementary regeneration of several major brown-field sites in the area, including the Royal Ordnance site at Euxton. Its conclusion was that this was a flagship site of significant potential for a major role in the regeneration and economic growth of the region.
My hon. Friend the Member for Chorley may also know that, in December 1993, under the Konver I Community initiative, a grant of £446,400 was awarded to Chorley business and technology centre towards a project at the Royal Ordnance factory site. The grant covered four elements—preparatory work for a future

scheme; surveys of the 60 hectares; a feasibility study for a soil bio-remediation centre; and creation of a manufacturing facility. I understand that the organisation has successfully provided workshop space on the Royal Ordnance site to assist small companies in need of new premises.
More recently, a working group has been set up to bring together the key local players, especially representatives from the two borough councils with a shared interest in the site. The site straddles the boundary between the two borough councils, Chorley and South Ribble, as has been explained. My hon. Friend the Member for Chorley will be aware of the two local plans for these, which propose a mixture of housing and employment areas and open spaces.
Based on those local plans, as they stand, the split is likely to be in the region of 10 per cent. for housing, 50 per cent. for employment and 40 per cent. for open space. That remains to be confirmed, as the local plans are still being debated, but I am sure that those provisional splits will go some way to reassuring my hon. Friend, and particularly my right hon. Friend the Member for South Ribble, that careful consideration is being given to achieving a balanced mix of uses.
My hon. Friend the Member for Chorley may be aware that an investigation of the site and building conditions has been undertaken in two phases, predominantly because of the size and the costs involved. The first phase, covering an area of 82 hectares, has been completed at a cost of £250,000, partially met by Konver assistance. The second phase, which is currently under way, will cost around £470,000. Again, part is to be met by Konver II, part by Royal Ordnance, and English Partnerships has agreed to contribute £118,000. That is substantial support, helping to speed up the process.
The important work is due to be completed by summer this year. English Partnerships and Royal Ordnance are in agreement that further progress is dependent on the findings and the recommendations. That is a sensible way forward. Once the site report is available, it will be possible for the various bodies involved to work out in more detail the joint approach. As I have said, there are more than 300 hectares to attack, and it is realistic to plan for phases over a number of years. There can be no quick fixes on a site as complex and as large as this.
Much is currently going on behind the scenes. Neither the private nor the public sector will invest in the site until we have a clear idea of what needs to be done to clean and clear the area. My right hon. Friend the Member for South Ribble will understand that, having piloted the Environment Act 1995 through some of its stages, predominantly its Committee stage.
I should like to suggest an alternative approach to my hon. Friend the Member for Chorley, who may wish to take it up with the local authorities. A part of the Royal Ordnance site could be designated as a simplified planning zone. That would have the effect of granting full planning permission for specified types of development, in advance of the precise development proposal being worked up. My hon. Friend may be aware that that is similar to the simplified planning procedures which operate within an enterprise zone, without all the long-drawn-out procedures.
The kinds of developments concerned, together with any conditions or limitations attached to them, are set out in the scheme which lasts for 10 years once adopted.


Developers are able to act in the knowledge that development specified in the scheme will be permitted, so they can go ahead without needing to go through the performance of a planning application. That removes one of the more bureaucratic drags on development that some local authorities impose.
To conclude, I must say that I am very impressed by the painstaking approach taken towards the planned development of the Royal Ordnance factory site. My hon. Friend the Member for Chorley will agree that our

resources need to be used wisely, and that we need to ensure that we obtain the outcome we wish to see, and that we get a clean and attractive site as promptly as reasonably possible. That is why I think that the procedure we are adopting now is preferable to the long-drawn-out, somewhat hazardous approach of an enterprise zone, which my hon. Friend has suggested.

Question put and agreed to.

Adjourned accordingly at twenty minutes to Eleven o'clock.